Ainsworth Game Technology Limited (ASX: AGI) – last traded at $3.24, down 11.9% for the year. Despite profit rising 18%, admirable revenue growth and a rapidly expanding international market, shares in pokie-machine developer Ainsworth responded by falling 10% with investors apparently disappointed with increased costs and slower growth than previously. Reporting 31 new licenses and explosive international revenue growth of 37% during the past year was not enough to stop the decline, with a number of investors making what I consider to be the extraordinarily poor decision to sell their Ainsworth shares. Even conservative stockmarket analyst Morningstar believes the company to be undervalued in light of its potential, with returns on invested capital of 20% believed to be sustainable in the long run. Morningstar estimates ‘fair value’ of the company to be around $3.90, leaving investors with plenty of scope for improvement in their investment. Alongside Senex, Ainsworth represents great value at current prices, and looks to have gone as low as it will go without any negative announcements.
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