Wednesday, August 31, 2011

Online gaming notes

FTAS 2800 +2.4%

BPTY 125.3p +13.9%
Online gaming company. Formerly PartyGaming plc. Brands include PartyPoker. Does bingo, too.

In half-year report issued today, pro forma total revenue down 3% due to competitive pressures in poker, the closure of French casino and the 2010 FIFA World Cup. Actual total revenue up 51% driven by merger. Current trading strong. The suspension of Full Tilt Poker's gaming license at the end of June removed a major competitor and consequently BPTY has seen an improvement in player numbers and average daily revenues.

Inititiation of share buy-back up to €75m

  • first impression is that they are disappointing with revenue down along with profit and liitle good news on regulatory front.
  •  very upbeat with statements like they will be back in the USA
  • Feel the SP is depressed due to fear on regulation and upbeat messages being ignored.
  • Great results and the divi is evidence of the progress.
 PER 6.6 ROE 4.6% (2010: 23.7%)

888 30.5p -1.6%
Provides online gaming entertainment, as well as B2B software, transaction processing, etc.

Half-year report issued today. Revenues up 18%, including poker revenues up 22%. EBITDA up 59% "This is a very strong set of results driven by good operating performances across our business lines. We have improved our offer, experienced good levels of new customer sign ups and activity has been at record levels." However, company made a loss in 2011. However, there were lots of impairment losses, amortisation, and acquisition expenses.

  • have no faith in this lot whatsoever now and without a sale, they are not going to survive in my opinion.
  • overpaid for Mytopia. Mytopia had given 888 "a foothold in a new segment" but that it had "unfortunately" failed to achieve predicted revenue targets and that the board had taken the “prudent” decision to write off the business’s value on the balance sheet as an “accounting operation”.

PER 11.51 ROE 13.12  Net cash 37m, mkt 105m.

PTEC 309p +3.9%
Half-year results were out  25 Aug. Gross income on a continuing basis up 19% and 8% on an aboslute basis. Total revune on a continuing baseis up 18% and 5% on an absolute basis. The Board has determined that due to exceptional joint venture and near term acquisition opportunities currently under discussion in certain key markets, it will defer a decision over the interim dividend until the final results for 2011, in order to retain maximum flexibility. Significant joint venture opportunities exist to create long term shareholder value in other regulated markets.

  • Playtech make money, and are going to make a lot more.
PER 8.9 ROE 28.9% Net cash 56m, mkt cap 752m.

Dangers of cheap

I liked this post over on PPP at Motley Fool, talking about MUBL (MUBL Group):
When I first invested in MUBL it was cheap. It was cheap because the market they were operating in was seen to be declining and over 80% of their business was with one client. My view at the time was that this risk was more than compensated for by the SP. I thought that the MRW was pretty safe for a few years and the cash that it produced could be invested in bolt on acquisitions which had a longer term future.
The OP isn't the first investor I've read about to have had a bad outcome from investing in a company with only one customer. Take heed.

PIC notes notes: Google TV failed to catch on in US last year due to antipathy of major US broadcasters, who saw it as a threat and promptly blocked it. Steve Jobs was "well aware" that Apple TV wasn't going to take over the world, calling it [Tim Cook's] hobby. Recent study showed children watch almost as much TV as a decade ago.

To what extent might Google be a disruptive tech that over the long haul will displace encumbents?

Interesting recent development : PIC launches 'Elements' software platform with cloud-based capabilities. The platform's open modular design allows one to add new features to their services quickly and cheaply. Sounds like operators can program new features, and make them easily available. Examples include personalising football viewing, recommending must-see moments to friends, as well as popular social networking.

Three modular products were mentioned:
  • Cobalt - hazy specifics
  • Oxygen - the front end
  • Tungsten - device software and middleware

This sounds quite exciting, and it will be interesting to see to what extent broadcasters utilise this feature.

Andrew Butter on Bernanke

From Stockopedia article:
Everyone was waiting with baited breath for the news about QE-3. But perhaps the number to watch was Q-3 nominal GDP, coming soon!! The important message Ben Bernanke had in Jackson Hole was that the Federal Reserve cannot, on its own, create economic growth in America (or jobs), simply by making it more or less attractive for banks to lend; and thus for Americans and foreigners to borrow. Or by printing money to buy over-priced toxic assets so the ATMs still work, or to help the Treasury improve the structure of their debt, by buying long bonds real cheap from Bill Gross…Hey Bill, that was a patriotic thing to do!

Tuesday, August 30, 2011

Sticky situations fund - update

Just a bit of fun to update the sticky situations fund.

  EPIC       THEN        NOW      PERF%      FTAS%
 PIC.L     107.70     101.20      -6.04     -11.47
 SHG.L      23.00      27.14      18.01     -11.12
 CWK.L     644.00     617.00      -4.19      -9.65
TALK.L     134.30     126.10      -6.11       0.25
 CPP.L     126.50     150.00      18.58       6.05
  JD.L     872.00     825.00      -5.39      -1.20
 ICP.L     229.60     239.60       4.36      -1.27
PTEC.L     303.25     298.75      -1.48       2.66

PERF% is percentage gain on share, FTAS% on All-share
XIRR sticky:      45.00% (Internal Rate Return)
XIRR   FTAS:     -46.00% (Internal Rate Return)

It's still far too early to draw any meaningful conclusions. SHG (Shanta Gold) is still doing the business. CPP (CPP Group) is continuing to do well, and ICP (Intermediate Capital) is starting to come good. I've had my eye on ICP for a few months, and despite thinking that they looked a good bet, their share price didn't go anywhere. RSI indicates that ICP has been oversold (but then, what share isn't oversold according to RSI this last week?). ICP has a beta of 1.23, it's a financial, it's on a PER of 7, which is about the cheapest it's been for a decade, there have been director purchases a few months ago, and management statements have been really positive. I have high hopes for this one.

PTEC hasn't exactly flown out of the gate. The shares aren't oversold on RSI (although it's pretty close to 30%). It has a beta of 0.74, so maybe it wont respond much to the thrills and spills of the wider market. Maybe it will continue going down for awhile, as people work off their frustrations with the postponement of the dividend. I am unphased about the postponement, as the directors seem to have identified some interesting acquisition opportunities. So what, now investors don't like growth? I wrote about its magic-formula-type characteristics  here , along with David Einhorn owning nearly 4% of it. Perhaps not too much emphasis should be placed on this, as he also owns the Mets, which I imagine is a vanity rather than business investment. It looks like my timing is going to prove off-base on this one.

Wish me luck on this little experiment of mine. And happy and successful investing to you guys, too.

Wednesday, August 24, 2011

Sticky situations fund - update

I finally sorted out some basic programming on the Sticky Situations fund. Here's the portfolio so far:

PIC.L    107.70   94.95 -11.8% -13.9%
SHG.L     23.00   26.50  15.2% -13.5%
CWK.L    644.00  635.00  -1.4% -12.1%
TALK.L   134.30  124.29  -7.5%  -2.5%
CPP.L    126.50  138.75   9.7%   3.2%
JD.L     872.00  873.00   0.1%  -3.9%
ICP.L    229.60  219.80  -4.3%  -4.0%
XIRR sticky: -0.00%
XIRR FTAS  : -68.00%

It's early days yet, but the sticky fund is holding its own. It is flat, compared with -68% for the FTAS (FT-Allshare). Some of the picks seem a bit marginal. SHG (Shanta Gold) is really hitting the ball out of the court, though, up 15% compared with FTAS down 13.5%.