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SHFL entertainment, AŞ Message Board

  • slot_man_1 slot_man_1 Sep 6, 2004 7:34 PM Flag


    AGI has negative growth, and is priced appropriately right now. What they get are the scraps that IGT is nice enough to give them. I sold IGT in the low 40's and am thinking about getting back into IGT, but thats a different matter.

    Shuffle Master, with its mammoth growth can't be compared to a company like AGI. First of all, not only is it an insult to SHFL, but the companies cannot be valued side by side using the same criteria. You cant look at the P/E ratio of a growth company like SHFL and say its over valued--40x earnings for their current and future growth is not out of line. I believe $40 is a good target--above that might be a stretch.

    AGI, with its low P/E ratio and no growth is priced at full value right now in my opinion.

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    • Nice post slot man.

      It should be pointed out, though, that SHFL is selling at 28x next year's estimates. I'd bet next year's estimate will be bumped higher. When was the last time SHFL reported when they did not guide higher?

      This is in sharp contrast to AGI which has gotten in the unseemly habit of consistently guiding lower. Is it any wonder the disparity in valuations?

      Go SHFL!

    • Because that 6 million you receive was meant for the investors and not the option recipients. SHFL is somewhat responsible in at least keeping shares outstanding down. But, that is no excuse for option plans. They could have used your 6 million for more buybacks.

      However, IMHO it is ethically wrong for the executives to give away or distribute shares for free. The whole purpose of a stock is to represent ownership of a company. Who does it hurt the investors and the employees.

      How can employees be hurt if they are part of employee option plans. Because employees wages are fixed costs, if any of them buy stock, they will slowly chip away at ownership of SHFL.

      To prevent this option plans are created to give management complete control of the company shares and thus ownership.

    • The earnings last quarter were only $6 million. That means we are paying one employee yourself and much as the entire earnings of the company. If you are yosesell at least you have the decency, to buyback more shares than you give away in options. Which is the reason I bought.

      The question is what will happen when you see market saturation and slower growth in the future? Will you pump the stock and sell your last remaining options before the collapse?

      What would have happened to the stock if you took all the money that went to stock options, and funneled them into buybacks or business growth?

      The employees incentive should be to do their job, and an executives job should be to see earnings per share go up.

      The people that took the greatest risk in this company are the stockholders that paid for the salaries when the company had no earnings.

      BTW, if you are yoseselloff, great job!