Now that we have seen how the major casino stock stands, it is time to look into online gaming. But here we are faced with a greater diversity of industries: there are some betting and gaming companies that have gone public, such as Party Poker, Paradise Poker and Empire Poker; then there are the software providers, such as Cryptologic and Wagerlogic; and there are other service providers whose fortunes are tied to the gaming market, including payment processors such as Neteller.
[Note: we do not endorse or recommend the purchase of any of this stock. Before buying, do your research and consult with a professional. ]
Party Poker (or rather its parent company, Party Gaming) is traded in the London Stock Exchange (LSE) as PRTY since June 2005. Party Poker’s shares rose 11% on the first day of trading, and after its large and successful IPO (initial public offering) it was reported by The Guardian as “worth more than some of the oldest and most famous names in British business, notably Sainsbury’s, EMI, Rolls-Royce, British Airways, ICI and ITV. “
This is not surprising if you consider that Party Poker has on several occasions accounted for more than half of the world poker market , and that its estimated profit for 2008 â€" even after the withdrawal of US customers â€" is upwards of 29. 6 million pounds (around $60 million), with a total revenue of 235. 52 million pounds (around $500 million. ) The estimated profit for next year is even more ambitious, as the analysts expect revenue to reach 291. 27 million pounds (about $600 million) in 2009.
At the time of writing, these were the most important stats for PRTY, which is going for a very accessible 27 pence (about $0. 60,) and is expected to grow back slowly but surely in the next year.
Last Trade:—–27. 25 p
Prev Close:—–26. 50
1y Target Est:–34. 89p
52wk Range:–22. 00 – 60. 25
Avg Vol (3m):—15,210,500
Market Cap:—-£1. 09 B
P/E:———–15. 14 x
EPS:———–1. 80p
Dividend:——2. 78p(19-May-06)
And as we had discussed previously, the risk measurements for Party are as follows:
Alpha: 0. 0265
Beta: 1. 2942
Remember the Alpha measures the difference between a stock’s performance and what was expected of it, and a positive Alpha means the stock outperformed the analysts’ predictions (in this case by 2. 65%. ) The Beta compares a stock’s volatility with the market’s volatility, where the market is always 1, so a positive Beta means the stock is prone to vary more than the market ( in this case by 29. 42 %. )
After looking in detail into Party Gaming stock, you may want to a quick peek at other publicly traded poker rooms.
- Paradise Poker is operated by Sportingbet, a British company traded on the LSE as SBT. L, and Sportingbet’s share prices almost tripled their value after the acquisition of Paradise Poker. After the passing of UIGEA Sportingbet shares took a big hit, but they migrated to the Boss Media Network and continue to do poker business with non-US customers. At the time of writing this, the price of a share is 42 British pence (about $0. 90. )
- Ladbrokes poker is part of the Ladbrokes gaming company, which includes a casino and the well-known Ladbrokes bookmaker, the largest in the world. The Ladbrokes group was formerly known as the Hilton Group (of hotel fame), which traded in the LSE with the symbol HG. L, but in 2006 it disposed of the hotels division to focus on gaming, and it now trades as LAD. L. The price of LAD. L as we write this is £3. 07 (about $6. 50. )
- WPT Enterprises produces and televises the World Poker Tour, a very popular series of televised high stakes tournaments which generate most of the WPTE’s revenue, and since 2005 they also have an online poker website, which is not accessible to US residents. WPT stock is traded in Nasdaq as WPTE, and it is currently priced at $1. 16.
Read on to find out about the companies that make online gaming possible â€" software providers and payment processors â€" and their position in the market. | 
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