Price can protect downside risk

I believe the price of AGI is reasonably attractive here. AGI is trading on an EBIT of around 7 or 8. According to the press release dated 17th Nov earnings next year should be similar to this year. Which places it on a similar forward EBIT and a PE just under 11 (assuming 22 cents per share for FY 2016). I have to say I am happy for shorters to have their day as well because the company has very little debt and is not in danger of a dilutive capital raising - unless they decide to make a major acquisition. The price may head down from here, who knows. What I do believe is that at current prices it offers a pretty good long term risk reward scenario. The dividend yield is around 4 plus % and fully franked (though with only 46% of profit coming from Aus, and this ratio falling, that may change one day).

On another note the the Nova acquisition seems sensible. The plus side here is that AGI may be able to use Nova's game licences to leverage their own machines in class 3 and make an entry into the more bingo style class 2 machines which they currently have very little representation in, in the US. As to the loss of an experienced game designer? Time will tell if that person was worth $100 million, which is approximately the resultant hit to the market capitalisation.

Finally, I have been through AGI's press releases and annual reports going back a few years and feel fairly comfortable with the numbers mentioned above. What I would love to hear about is how good are their machines, after all this will largely determine their future sales. Is there anyone who has used their A560 and formed an opinion? What about the A600? The A600 is particularly important as this was released in August and will be their platform of the future that they can run their different titles on. Another useful measure would be their utilization in the casino or club. It would be great to get some info from this thread around the A600, as I only have the company word at this stage.

PS. In the ALL release yesterday they basically implied their market share in AUS is not expected to increase over the next year. Perhaps this is an early indication that the A600 is taking back market share from Aristocrat.