Buyback Guru Gambles on International Game

11/03/2014 7:00 am EST

Focus: STOCKS

David Fried

Editor, The Buyback Letter

David Fried, editor of The Buyback Letter, focuses exclusively on stocks that are actively repurchasing their shares; here, he looks at a casino and “social gaming” play.

International Game Technology (IGT) is a global leader in casino gaming entertainment, specializing in design, development, manufacturing, distribution, and sales of computerized gaming equipment, software, and network systems.

IGT originated as a private company in the 1950s but it went public in 1981 to go global, pioneering the concept of computerized player tracking and casino "frequent-player rewards" programs. It had early success with a revolutionary video poker machine gaming product.

IGT brings its gaming products to both casino floors (games, cabinets, systems) and to what is called—“social gaming”—online casino-style entertainment.
IGT's DoubleDown Casino is the world’s largest free-to-play online casino, with more than six million players per month.

It’s a top-ranking app on Facebook and allows casino owners to connect with their players outside their property as guests play their favorite casino games online while surrounded by the casino’s brand environment (Web site).

Then casino operators can connect with social casino gamers in their area and offer incentives for online guests to come in and play on the casino floor.

In July, IGT announced it would merge with GTECH S.p.A. In August, International Game announced a cash dividend of $0.11 per share on its common stock, a 10% increase compared to same quarter last year.

This was the 46th consecutive quarter IGT paid a dividend, currently the longest streak in the gaming industry.

The company's Q3 earnings were 28 cents/share, down 14.8% from 33 cents reported in the year-ago quarter. Although gaming operations revenue declined, Interactive was up 14.6%, with Social revenues up 17% year-over-year. IGT has reduced shares outstanding by 5.21% in the past 12 months.

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