Ainsworth Game Technology (AGI)

Discussion in 'Stocks & Derivatives' started by finicky, Aug 27, 2014.

  1. finicky

    finicky Well-Known Member Silver Stacker

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    Worth revisiting and watching if you're not bothered much by the nature of the business. Ainsworth has further expansion potential in North America and Latin America - is significantly increasing revenue from there.
    Reported FY14 earnings per share 19c, up 19%
    Full Year Dividend 10c unfranked, which is 3.1% yield on a $3.25 S.P.
    So dividend is unimpressive at this price, albeit a 25% increase on FY13. An unfranked 3% dividend is not alluring considering the alternatives.
    The P/E too is a tiny bit stiff at 3.25 / 0.19 = 17, but hardly extreme considering earnings growth just achieved of 19%
    ROE this past year would be roughly 29%
    No debt to speak of and net cash of $72m

    The chart holds interest as I'm seeing it as a possible neckline break of a sloping head and shoulders topping pattern.
    It's too early to claim confirmation but I'm seeing a 17 month upsloping neckline coming out at about 3.75 which had a tentative break in 1st week Aug, and this week could be breaking down more emphatically. I'd be seeing a weekly close below 3.25 with some volume as confirmation? Current bid is 3.24

    Disclosure: not held
    Sentiment: short term sell, possible future buy
    http://forums.silverstackers.com/topic-35402-gambling-stocks.html

    [​IMG]
     
  2. Stick Framer

    Stick Framer New Member

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    Still holding this, been in for nearly 2 years. I'm up 11%
    It been a steady performer
     
  3. finicky

    finicky Well-Known Member Silver Stacker

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    Yep, growing profits. May well eventually recover but go through a correction first? When I give my sentiment as short term sell, possible future buy - it only refers to what I think I might do, not saying that someone else should sell if they hold. It still has support of at least one prominent value investor, but I don't trust his public promotions any more. The chart seems near a point of decision (3.25) or maybe it has already passed it (3.50). Look at the negative volume for last week - there's no higher weekly volume in the 2 years of duration of this chart and you'd have to look back to 2008 to find higher negative weekly volume. But the thing is, this negative volume is occurring when the lows of the last 17 months look in danger of being exceeded. Will start to change my view if the price gets back over 3.50

    [imgz=http://forums.silverstackers.com/uploads/1893_agi_wkly_2_yr_aug_29.gif][​IMG][/imgz]
     
  4. finicky

    finicky Well-Known Member Silver Stacker

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    An alternative interpretation from Michael Gable. Many sophisticated chartists seem to ignore patterns in charts, such as a 'head and shoulders' topping pattern. He sees the volume coming in at support level as affirmative because of other indications such as RSI and also considering price to earnings fundamentals. I see selling volume here as ominous against the backdrop of an interpreted H&S pattern. If it gets above 3.50 with volume I'll assume he's right and maybe learn a lesson.

    Michael Gable on AGI - comes in at 3.25 on the clip ..

    "That big move downwards occurred at what appears to be the end of a downtrend anyway on very high volume. So it suggests to me that it's washed out the last of the sellers. We could see an exhaustion low here in AGI. I've also noticed that the stock's become oversold on the RSI, and it's come back up triggering a short term buy signal. Down at this support level I think AGI should bounce from here.
    Could head straight up or go up a little then retest the low.
    Around this level is good buying for AGI, it's trading on a cheap multiple (P/E)"

    September 01, 2014
    Video comments on Ainsworth at 3m25s
     
  5. finicky

    finicky Well-Known Member Silver Stacker

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    Michael Gable's viewpoint was published early Sept 1. But give him benefit of doubt and assume a short term trader could have watched and picked up AGI in the mid range of that day and sold exactly at the end of the rally 4 days later. He would have scalped at most 5%. If he's still holding he would now be down 6%.

    So it's not looking good for the idea that the deep selling days before the video were washing out the last sellers and that, quote, "We could see an exhaustion low here in AGI"

    The break of a neckline would suggest a minimum target of 2.75 and I'm thinking 2.50 - 2.25 is a chance.
    Caveat: expecting a short-lived bounce any day now - it's unlikely to last imo.

    Feels like the first decent buying idea in a while but the concern is buying anything when you expect a general market correction before long.

    Why should AGI be sold down? Maybe it could be profit taking and profit protection from owners of the massive 2 year rally out of the base at 0.75? A 50% correction of that rally would be 2.75! Also buyers and holders from above the 3.25 or 3.50 neckline are feeling the loss increase with each day, stop loses being hit - "selling begets selling".

    Sentiment: bearish on AGI, wait to buy
    Disclosure: not held

    [​IMG]
     
  6. thanatos0320

    thanatos0320 New Member

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    I know I'm late, but there are a few things I've noticed about the company that stand out. The firms has pretty good working capital but that could be a problem according to what their current ratio is. Their current ratio is really high. It's a sign that they don't have problems with debt obligations but it could also be a bad sign that management isn't making sure the firm is efficiently using its current assets. The company has a ROE of 22% which is great. Sometimes companies can manipulate their ROE by taking on more debt. Because of that, I decided to check out the company's financing. Their PEG ratio stands out. It's below 1. Usually a PEG ratio under 1 is a sign that the company is undervalued, but after looking at the 5 year chart you see that the price of the stock increased greatly and is now declining. So is it undervalued or not? You would need to compare some of their statistics to the industry average and do a ton more reading on this company. Anyone here ever use Bollinger Bands to do your technical analysis? The stock price is approaching that bottom band. These are just some random things I thought I'd throw out there to give you guys some things to think about.
     
  7. finicky

    finicky Well-Known Member Silver Stacker

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    Yes I didn't look at the volatility indicators but the monthly one suggests a better than even chance of a rebound. Makes me a bit nervous about my call actually.

    Market valuation is about the future and the PEG of < 1 we're looking at is backward looking. At P/E of about 17 and FY14 earnings per share of 19c (FY13 was 16) the PEG (P/E divided by earnings growth) makes AGI look cheap, but the energy was all in the first half. The second half of FY14 was down on H2 in FY13. So what does that imply about the earnings growth in FY15 and beyond? Apparently from comments elsewhere the company's guidance on that was not ringingly clear.

    Today will be interesting though with a positive lead from DJIA and a bounce due for AGI.

    [imgz=http://forums.silverstackers.com/uploads/1893_agi_sept_17_mthly_bollingers.gif][​IMG][/imgz]
     
  8. finicky

    finicky Well-Known Member Silver Stacker

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    AGI could only muster a weak 2 day bounce since last post and then went into 4 days of decline so far. Could not even bounce as far as 3.25 which is a significant level. Closed today at 2.92. Volume on the 4 day decline is not exceptional, but is above average and seems to be trending higher. Still expecting more downside and 2.75 is a cert at a minimum.

    The videos are a year old but offer a glimpse of their US expansion.

    Sept 24th 2013 - Global Gaming Expo (G2E) 2013
    Frank Fantini interviews Danny Gladstone of Ainsworth Game Technology
    [youtube]http://www.youtube.com/watch?v=M-lETRfTEwk[/youtube]


    [youtube]http://www.youtube.com/watch?v=Op1Ey-ONL4I[/youtube]
     
  9. finicky

    finicky Well-Known Member Silver Stacker

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    Bit of a stalemate last few days. Got my own little buy signal for a first lot if it rises. Keep on doubting my medium term view of the chart (down)
    The volume has slacked off last few days, drifting sideways, and small candles = no urgency of selling. But this is just a daily view, not a lot of use for a strategic buy.

    Ainsworth Game Technology to bring jobs to Las Vegas


    [​IMG]
     
  10. finicky

    finicky Well-Known Member Silver Stacker

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    Strong low made on the daily, note the gap up today and that daily volumes are strong. But is it THE LOW? The one that reverses the 1 year downtrend? Only way to improve your chance of picking THE LOW that I know is to sacrifice gains off the suspected low and buy later after 'key' levels are passed.
    Reached down as far as 2.78 intraday Oct 16 - do I get a koala bear stamp for minimum target 2.75?

    [​IMG]
     
  11. finicky

    finicky Well-Known Member Silver Stacker

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    2 mth Dly Chart, no comment yet

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  12. finicky

    finicky Well-Known Member Silver Stacker

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    In for a few @ 3.09 fwiw.
    I've chosen 3.10 as my key level. If it breaks through there I figure the low has a bit more substance than just a bounce within a continuing downtrend.
    Prices are bunching under 3.10, should have really waited for it to break through.
    I thought it was interesting when the high volume full red candle day Oct 30th was immediately reversed with a following black (positive) 'inside day'. Could it indicate the price was being deliberately worked down for accumulation purpose?
     
  13. finicky

    finicky Well-Known Member Silver Stacker

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    In for a few more @ 3.09
    Not very disciplined
     
  14. finicky

    finicky Well-Known Member Silver Stacker

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    In for a few more @ 3.01
    Not very disciplined
     
  15. finicky

    finicky Well-Known Member Silver Stacker

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    Well I s'pose I have to follow up :eek: At least I got the topping pattern and first target (2.75) right.
    AGM with update on trading performance tomorrow. Maybe it was being manipulated up, not down as I suspected. Or not at all.
    Shot my bolt and can't risk adding more to average down.

    Daily
    [​IMG]
     
  16. finicky

    finicky Well-Known Member Silver Stacker

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    Picked 1,000 more @ 2.70
    Went straight to bottom page of the M.D's AGM address, wasn't alarmed, (insert 'what me worry gif)

     
  17. finicky

    finicky Well-Known Member Silver Stacker

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    So jumped the gun

    [​IMG]

    Only worth a thumb gif
    [imgz=http://forums.silverstackers.com/uploads/1893_agi_3_mth_nov_20.gif][​IMG][/imgz]
     
  18. finicky

    finicky Well-Known Member Silver Stacker

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    2.25 hit today - picked up 1000 with waiting bid

    Is that it? God I hope so.
     
  19. phrenzy

    phrenzy In Memoriam - July 2017 Silver Stacker

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    I just put in an overnight order for 1000 at $2.30, we'll see tomorrow if it gets filled in the morning. My first ever share buy! I should buy a tie to cut in half!
     
  20. finicky

    finicky Well-Known Member Silver Stacker

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    Well phrenzy, let's hope this selling is mostly panic or investors cutting losses or saving what profits are left. Let's hope it isn't selling from certain fund managers who have information that the rest of the market does not have. Stocksinvalue currently sees AGI as selling at 31% discount to fair future value on estimated fy15 earnings. Status was updated 24-Nov-2014 after being reviewed post AGI's AGM guidance, that guidance paraphrased: " .. the Company (AGI) advises that it expects to report a lower profit in fy15 H1 compared to the corresponding period fy14. However It is expected that given the weighting more aligned to the second half, overall profitability for FY15 should be ahead of the previous 2014 year".
     

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