Inside Wall Street
THIS JACKPOT MAY SOON SWELL
Shareholders of Jackpot Enterprises have been waiting a long time to hit--you guessed it--the jackpot. Many impatient investors have bailed out. But the patient may soon be rewarded, say some pros. The stock is sending off sparks, rising from 7 to 11 on the Big Board since December.
"Jackpot could easily double from here based solely on the prospects of an expansion of legalized video-lottery terminals," says investment adviser Charlie La Loggia. "Video gaming will be a growth industry in the 1990s, and Jackpot is a natural play in it."
The company owns and maintains some 3,000 coin-operated slot- and video-poker gaming machines in high-volume retail stores in Nevada, including Kmart, Lucky Stores, Vons, Phar-Mor, Albertson's, and Payless Drug Stores. It also owns two casinos in Nevada and has a minority interest in a South Dakota casino.
Jackpot Chairman and CEO Neil Rosenstein is confident that the company will soon be doing business in three to four additional states where video-lottery terminals are expected to be authorized. So he's certain that his goal of upping Jackpot's installed machines to 3,500 this year is in the bag.
Initially, the company will bring video-lottery machines to South Dakota, says Rosenstein. Iowa, Louisiana, Mississippi, and Oregon are the other states that he expects to authorize video-lottery machines this year. Experienced gaming-machine operators will be important to these states, says Rosenstein, and "Jackpot's financial position and reputation puts us in an enviable position to take advantage of these emerging markets."
Analyst Ken Gassman of Davenport & Co. of Virginia sees earnings jumping to 45 cents a share for the year ending June 30, 1992, vs. last year's 25 cents, and to 75 cents for fiscal 1993.GENE G. MARCIAL