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...

Join Seeking Alpha PRO to read this archived article and 11,574 other archived articles
IDEA GENERATORXExclusive access to 10 PRO ideas every day
INVESTING IDEAS LIBRARYXExclusive access to PRO library of more than 15,000 ideas
SECTOR EXPERT NETWORKXExclusive access to all sector experts for direct consultation
PERFORMANCE TRACKINGXTrack performance of all PRO stock ideas
PROFESSIONAL TOOLSXProfessional Idea Filters to zero-in based on industry, market cap and more
"In just the first month of using PRO, I used it to generate two ideas which were actionable for me. As a result of these two positions, I have earned more than 20 times the annual subscription costs for PRO."Michael Yagemann, Greenbridge Capital
"I am pleasantly surprised with the scope of small and mid-cap coverage PRO offers. You can't find that any where else."Patrick Rice, Mainstay Capital Management
You may cancel at any time for any reason, and receive a prompt refund for membership on months paid and not used (max. 6 months). Details