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

Multimedia Games Is An Attractive Provider Of 'Picks And Shovels' To The Growing Casino Industry

Investment thesis

Multimedia Games (NASDAQ:MGAM) has a rapidly growing recurring and high-margin revenue stream that generates an impressive amount of free cash flow. The small size, net cash position and multiple competitive advantages make it a prime takeover target given the recent industry M&A activity.

Company overview

MGAM supplies gaming units and systems to Native American and commercial casinos, including the central determinant system for the New York Lottery. MGAM generates virtually all of its revenue from the U.S. after exciting the Mexican and Maltese markets.

Expanding beyond core Native American market with new products in more states

MGAM grew from a bingo game provider to Native American casinos primarily in Oklahoma to a provider of premium and...

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