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WMS Industries to Continue to Succeed in 2011

|Includes: LVS, WMS Industries Inc. (WMS-OLD)

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Back on July 6th, I recommended everyone to buy WMS Industries (NYSE: WMS) in the article “Hit the Jackpot With WMS Industries.” Since then the stock has gone up a solid 30% rising from $37 all the way to $48.50.  Below is the chart to see WMS Industries solid growth throughout the past six months:

For those of you who don’t know anything about WMS Industries, below is a perfect explanation of what they do and why it’s a great investment:

Even while Vegas continues to struggle, the gambling industry itself continues to succeed. The demand for slot machines have been growing rapidly the past few years and I don’t see it stopping anytime soon. So we have found a growing industry the question is how to make money off it? Well my play is to invest in WMS Industries (WMS). WMS designs casino gaming machines and video lottery terminals. They provide systems that improve the efficiency of slot machines. With their advancements in technology casinos can control all their slot machines under one single server. What does this mean? Well with one mouse click, a casino could change all of its nickel slot machines to $10 video poker games in the matter of seconds. With things being that easy you can now see how this company has become quite popular. Casinos have been lining up to acquire these systems with Las Vegas and Macau being the two major players. The convenience is worth the money, as a task that use to take hours now takes as little as seconds.

So what makes WMS a great investment?

WMS has managed to consistently increase profits, rising 10% last quarter. They have cut costs and limited liabilities while still expanding across the globe. The most impressive factor is they are currently sitting on $161 million of cash. With a solid PEG ratio of 0.8 along with Price-to-Book ratio of 3.3 and Price-to-Projected-Earnings ratio of 20, WMS is a very strong investment. Adding to this, the expansion in the gaming industry both domestically and internationally is expected to grow exponentially and increase WMS’s product demand. As Las Vegas and Macau start to pick up again, WMS should see added business. We have seen the stock rise nicely over the past six months and I am a firm believer that this stock has great potential and believe it will rise to $62 within the next 12-months.

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Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.