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The market correction has taken down the value of nearly everything, including stocks, junk bonds, gold, oil and more. When you see indiscriminate selling, it often provides investors with an opportunity to buy solid companies at bargain prices. Here are some undervalued stocks in the gaming sector that analysts believe could just about double in value:

Wells Gardner Electronics (NYSEMKT:WGA) is a leading maker of color video monitors for a variety of markets such as gaming machine manufacturers, casinos, and coin-operated video games. This is a high-potential stock because the state of Illinois recently approved new video gaming terminals statewide, and just a few weeks ago, granted Wells Gardner one of the first distributors licenses.

This new market is expected to nearly double revenues for this company in 2012, and that could lead this stock to more than double from current levels. This new product line could turn this value stock into a growth stock. It could also be a takeover target by a larger gaming machine maker like International Game Technology (NYSE:IGT) or another gaming machine maker looking to buy before the new gaming terminals launch in 2012. The company expects other states like Ohio, Pennsylvania, Iowa and Kentucky to possibly follow Illinois, in what could become a new wave of gaming. This is because tax revenues are badly needed by most states, and taxation from gaming is considered to be non-invasive.

Wells Gardner expects sales to commence in the later part of the third quarter of 2012, which is coming up very soon. The company had revenues of $42.9 million in 2011, and it has provided guidance for revenues of $60 to $70 million in 2012, and $75 to $85 million for 2013. That means revenues could double in just a short time. Wells Gardner has been in business since 1925, and it is profitable now.

However, the huge opportunity it has now could change it from being a little-known stock into a growth investment as revenues jump higher in the next couple of quarters. One investment firm has set a price target of $5 for the stock in the next 12 months. Because of the market correction, the stock is trading at attractive levels now, in what might be a final cheap buying opportunity before the third quarter sales ramp-up.

Here are some key points for WGA:

  • Current share price: $2.10
  • The 52 week range is $1.68 to $2.52
  • Earnings estimates for 2012: about 25 cents
  • Earnings estimates for 2013: about 50 cents
  • Annual dividend: A stock dividend of 5% is paid which means if you own 100 shares, you will receive 5 more shares each year.

MGM Resorts International (NYSE:MGM) is a potential turnaround stock for patient investors. The company has been posting improved financial results, but it is still expected to post some losses in 2012, and possibly 2013. The company has reduced debt in the past couple of years, and it has opportunities to refinance major amounts of debt in the near future, which could lead to substantial savings. A major debt refinance at much lower rates would be one big step towards restoring long-term profitability.

MGM owns many of the largest hotels and casinos in Las Vegas, with properties like Mandalay Bay, The Mirage, Monte Carlo, Aria, Bellagio, New York-New York, and others. This gives allows the company to cater to both high-end and the middle class consumer.

One big recent positive is the huge drop in the price of oil. The price per barrel was well over $100, but now it trades for just about $85. If this level holds, it should result in much lower gas prices in the coming weeks. Cheap fuel is like a major tax cut for consumers who will feel better about taking vacations and spending more when they are in Vegas. Thanks to smart management moves, this company is seeing a clear upward trend. That makes this stock worth considering, especially on dips. Analysts at Stifel Nicolaus recently gave MGM shares a buy rating and set a $20 price target. This would give investors buying now, gains of almost 100%.

Here are some key points for MGM:

  • Current share price: $10.87
  • The 52 week range is $7.40 to $16.05
  • Earnings estimates for 2012: a loss of 46 cents per share
  • Earnings estimates for 2013: a loss of 20 cents per share
  • Annual dividend: none

International Game Technology is a leading maker of casino games and it has a history of making acquisitions. Earlier this year, the company announced a deal to buy Double Down Interactive, a maker of online games, in a deal valued at about $500 million.

Here are some key points for IGT:

  • Current share price: $13.83
  • The 52 week range is $13.12 to $19.15
  • Earnings estimates for 2012: $1.03 per share
  • Earnings estimates for 2013: $1.21 per share
  • Annual dividend: 24 cents which yields 1.8%

Disclaimer: Data is sourced from Yahoo Finance. No guarantees or representations are made for accuracy. Hawkinvest is not a registered investment advisor and does not provide specific investment advice. The information is for informational purposes only. You should always consult a financial advisor.

Source: Wells Gardner And MGM: 2 Gambling Bargains Analysts Expect To Double