John Leonard, CFA
Special situations, micro-cap, contrarian, CFA

Time To Bet On Global Cash Access

Global Cash Access (GCA) is undervalued given its high free cash flow and strong market position.

Company overview

GCA provides cash access products and services to the gaming industry through ~1,100 casinos in over 35 countries. GCA distributed ~$21 billion in cash to gaming patrons in 2012 through more than 90 million transactions.

Virtually all U.S. gaming transactions are completed in cash and 60%-plus of all wagered funds come from on-floor cash access services. A vast majority of casinos outsource cash access service to third-party providers due to lack of scale and the fact that these services are not considered a core competency.

GCA generates revenue from three primary segments:

Cash advance. This consists of transaction fees...

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