Ed: I don't want to be handing out advice, especially quantitative advice, on when to buy either. However, I will point out, for Steve's evaluation, a few factors to consider in making his decision. You have already listed some of the key ones, Ed. Let me take your comments and elaborate:
1. New management. It should be obvious by now that there is a new attitude in the management of this company. If anyone need a list of reasons why I think this is so I will be happy to provide it for them.
2. Stock buyback program. With this program apparently in action, the downside risk to an investment at this point in time is significantly reduced.
3. Cost cutting actions. Although we have not yet seen the effect of Mr. Hilliou's cost cutting proposals enumerated in an SEC filing, I don't think there is much doubt these reductions are for real. The move to Columbia, SC is one example.
4. New ventures. We don't have any information yet on how or when Mr. Hilliou will put AB&G's cash to work but I have no doubt he will do so and, given his experience in the gaming industry, I have confidence he will make wise choices.
5. Supreme Court. Yes, there is a risk this decision could go against the gaming industry. However, one could make a case that the market has already factored this possibility into BNGO's price. As I have frequently stated, I don't put much credibility in the "illegal lottery" concept the anti-gaming forces based their case on. One aspect of this legal situation a prospective BNGO investor should consider is, "What will happen to BNGO's share price if the outcome of this case is FAVORABLE to the industry?" I think it is safe to say a favorable legal decision will NOT hurt the stock price. My personal opinion is that a favorable legal decision will be a significant boost to the stock price. I think it is HIGHLY unlikely we will see prices in the low 3's again if this case is resolved in our favor. In addition, there is no good way of knowing exactly WHEN this decision will be announced. All I know is that the SC Supreme Court USUALLY issues new opinions on Mondays. But, this announcement could be 3 days or 3 months from now - who knows. If I am right about a favorable outcome boosting the price significantly, those who do not buy before the decision is announced will have to buy at much higher prices if they still want in.
Steve, you are going to have to make up your own mind how all these factors balance out in your own risk-reward calculation. Good luck whichever way you choose.
TKA |
