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Advanced Drainage Systems, Inc. Message Board

  • masson111681 masson111681 Jul 3, 2012 12:23 PM Flag

    Question

    I am looking at this stock because the casinos I go to (Vegas, Chicago, Mississippi, and Florida all have had a large influx of WMS machines replacing the IGT ones.
    The graphics are superior, the sound better, and the games are more complex and interesting.

    I had expected to see a greater revenue increase. Is there a profit margin issue? bad management? (a tip in from what I read on this board).
    Debt seems to be in good shape.

    So as Vegas starts to get busier (and they are) there should be revenue and profit growth.

    Any thoughts would be appreciated.

    DX

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    • I would wait for some sign (in terms of shipments from all the major players) that the long awaited replacement cycle has really begun before moving in here. Also pay close attention to ship share by manufacturer as WMS was giving up some hard fought ground, at least the last time I ran the numbers for WMS, IGT, and BYI (and that was a year ago or more). I think you will have plenty of time to get back in for a ride up when that becomes apparent, although the downside risk here doesn't appear large. It could just continue to be dead money for a while.

      Margins have been an issue in part due to pricing pressures, in part due to increased internal expense (they are doing a pretty major expansion of the engineering campus on California).

      I remain on the sidelines with this one until there's some signs of renewed growth. There's just too many other stocks moving up right now.

    • You definitely can form your impressions from the quality of their games.

      If you buy and sell when Brian Gamache buys and sells, history shows you will do well.

      Aug 7, 2011 GAMACHE BRIAN R
      Officer 55,200 Direct Purchase at $18.12 per share.

      I already hold the stock. I might buy more if price gets to $19, or at least below $20 and there is no bad news to justify the move down.

      They generate a lot of cash - some day I hope they pay a dividend. Otherwise it is has just been an up and down stock that requires purchase and sale timing.

 
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