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Strategies & Market Trends : Value Investing
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From: Iron Mick5/17/2023 9:45:27 AM
   of 78719
 
ACEL

This one is a bit outside of my comfort zone but hit my radar and have begun tracking.

$9.15/s and is down 24.88% from 52/w high.

23.69% 5-year compound revenue growth
PE 12.2
PS .74
EV/EBITDA 6.26
Current ratio 3.2
Quick ratio 2.89
ROE 37.7%
Gross margins 37%

Aside from 2020 COVID their growth has been consistent since they first reported in 2017. They generate revenue from three sources 1) gaming terminals 2) amusements 3) ATM.

Illinois is their biggest revenue generator:


And Illinois just saw a big increase in gambling spend as casinos generated $128M more revenue in April '23 than in April '22. So while not specific to gaming terminals, does hint there is an appetite for gambling there.

Throw in the Chicago suburbs that are really starting to loosen and allow gaming terminals inside restaurants and there is potential.

D/E ratio is higher than I would normally go for but compared to their peers they are on the lower end.

They do seem to have a messy lawsuit with a company they gave loans to called Gold Rush. In short they have about $32M of convertible notes listed as current on their BS that they hope to have resolved this year. I must do more research here though as this is complex and need to better understand. They also have a lawsuit with an Illinois municipality over taxes - all this has cost them $1M and is being contested in court.

Curious on the groups thoughts.

-Sean
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