potential short...

[scalf]

/forums/images/icons/shocked.gif igt forms a bearish 3 drives pattern on charts when it reaches 78.5...gr8 short then...jmho...not for trading purposes..gl /forums/images/icons/grin.gif

[Mark Heide]

scalf,

In this case, I expect IGT to have more upward momentem, because it is undervalued. The majority of analysts have strong buy recommendations on it, and it is selling at a discount still.

This company's main success is due to slot players loving those new nickel machines where you put in 45 or 90 nickels a spin, along with the novelity of Austin Powers, I Dream of Jeannie, The Munsters, Monopoly, Dick Clark, and whole bunch of other novelty games.

GL

Mark

[Wildbill]

Mr. Value thinks a stock with an over 20 P/E is undervalued??? Thats a new one out of your book Mark. This stock is far overvalued, I have some pretty good knowledge of it and I think its being driven by a lot of hype about new gaming markets. Every bit of good news is priced in already at this point, I think a fairer price is down around 60-65. Problem for IGT isn't in growing, its that they are too big as it is. If you are 70% of the market, you have a hard time keeping up the growth rate indefinitely. Just think of Microsoft's dilemmas, the no doubt about it leader of its profitable niche, but running out of places to put its cash horde and continue being a growth company. Then again I have thought this stock was overpriced for quite some time and it has shown strength so far, but I get a feeling those jumping on now are last to the party types. Gaming stocks run in pretty predictable patterns and the next move looks to be down or at least sideways. If you really want to play this segment there is still a little upside left in ALLY, they are quickly consolidating the 2nd place in the category and their new strength might actually take a little share from IGT as their games are newer and the casino customers hate giving all their business to the big monopoly.

[Mark Heide]

Wildbill,

After IGT's close on Friday it's not much undervalued at all if you agree with quickens basic model for intrinsic value which I posted a link to:

http://www.quicken.com/investments/seceval/?p=IGT&cmetric=intrinsic

But, if you are like me, I wouldn't touch any stock in the market right now. I think you know from my previous posts that I do not like the economic situation right now, and believe the street is ignoring it in favor of the holiday season, and due to historical technicals.

GL

Mark "The Value Bear"

[Wildbill]

Well here is a secret, IGT has been consistently, for many years in fact, said on all their press releases their growth goal is 15% and at times have toned it down to a little less. So this model saying it has to grow 16% is faulty. Further this model doesn't recognize business models and markets. This assumes you could continue that growth indefinitely, but if you know the gaming marketplace like I do (its my job), then you know that continuing to grow even 15% would require either an unprecedented opening of gaming in more locations or something completely unseen so far being released into the market. I don't see signs of either. There will be growth and there will be new markets, but IGT is already about 70-75% of most important US and Canadian markets, their only hope is that the foreign markets become absolute blockbusters. It could happen, but don't count on it. Think of it this way, Microsoft already owns a good market, but how much more of a market can you make of it? Then think if Linux and some other competitor got stronger and starting getting at least some traction in terms of getting some niches to use their software. Microsoft faced this and did the smart thing, they went into completely different markets. They wanted to grow and saw the need to go out and be strong in other things than their core competency of operating systems and software. IGT has consistently said they will not do this, in fact they have made efforts to keep very focused on exactly what they do.

So while they will still make a ton of money and have lots of cash to keep them from being a negative investment, I think they are just getting ahead of themselves in price. There certainly are worse places to put your money, but I don't see value and for a short-term move such as Scalf is looking at I think its probably a good place to put in a short or avoid holding it until it goes back to $55-65 range.

[Wildbill]

What a start with this one, it hit 78.4 (almost exactly as you said) and then hit a wall ending down for the day, about $2 from your trading point. Do you move Soros' money for him? /forums/images/icons/grin.gif

[scalf]

/forums/images/icons/laugh.gif i actually shorted at 78.25...gotta watch the upticks...overall target is 60...67 may have significant resistance...of course igt may go to 82 and i'll cover then...just a lucky guess so far...

also shorting gsb at 37
and dna at 35..both have formed bearish gartley chart patterns...jmho...not investment advice,,,gl /forums/images/icons/smile.gif

[Wildbill]

You beat me, I got in at 78.1. Lots of the runup has been due to election speculation, I think sell on the news is part of the drop today and probably will push it down the rest of the week. I might close out half or all of the trade by Friday. I think it will go to around 71-72 range and I will gladly take a near 10% gain for the week /forums/images/icons/grin.gif

I have to say this has been a very peculiar run. Elections are certainly a way to boost IGT's long-term growth as more markets can open up thorough it, its just that none of the elections today seem to carry any surprise factor. Best case scenario for the suppliers means extra 12,000 machines to split amongst themselves over a 3 year period, nothing special for a company like IGT, but there is also a little downside surprise possible and that is why I think the stock will see pressure. In any case what happened is all these analysts said "hey look IGT could do better because of these elections" and the suckers that never followed the stock bought into it indiscriminately and might pay for it now because anyone with any savvy for this name and industry knows there isn't much really going on. Its just it came to some people's attention. I think a lot of this happens quite often and charts help you find stories like this, where the smart holders of the stock wait for opportunities like this to pop up and they sell the stock and then go back to waiting for lower resistance where the crowd has been moved out of it by poor recent performance. Gaming stocks are definitely good for chart followers, they follow very predictable patterns over time just because the sentiment and drivers are generally the same for everyone.