Alliance Gaming's Winning Streak
If there's a comeback kid in Las Vegas, it is slot-machine maker Alliance Gaming (ALLY ), whose stock has rocketed from 9 in January to 37 now. Powering the giant gain: Alliance is finally in the black. After four years of losses, Alliance is expected to post earnings of $2.17 a share for the year ended June 30, 2001. In 2002, analysts expect $3.10. Another stimulus: the introduction later this year of its new EVO (short for evolution) video slot-machine platform.
Richard Weinstein of vFinance Investments, which has assets of $1 billion and owns Alliance shares, says EVO, designed by Alliance's Bally Gaming unit and powered by the Microsoft Windows operating system, delivers faster and more entertaining graphics. The higher-priced EVO platform will be a big moneymaker, says Weinstein. Alliance also holds two patents for cashless gaming technology, which lets customers get their winnings in the form of electronically coded tickets rather than coins. The cashless machines will be a big hit in casinos, says Weinstein, who has a target of 60 for Alliance, based on 20 times 2002's estimated earnings of $3.10. Dan Davila of Hibernia Southcoast Capital says Alliance should grow substantially in the next few years, thanks to a "robust" replacement cycle for gambling equipment.
By Gene G. Marcial