From the Fin, Ainsworth Game Tech Price $3.32 Market cap $1.1b...

From the Fin,

Ainsworth Game Tech
Price $3.32
Market cap $1.1b
Moat factors High barriers to entry in gaming technology; strong intellectual property.
After soaring ninefold in two years, Ainsworth has fallen from a $4.79 peak to $3.32. The electronic gaming maker’s net profit of $61.6 million for 2013-14 was below expectations. Costs were higher than anticipated, growth in its Asian business slower, and there was no earnings guidance. Ainsworth’s rally made it “priced for perfection” and vulnerable to the slightest disappointment. But price weakness has created opportunity. Beneath the headlines was strong growth in Australia and North America, and a jump in free cash flow. Longer term, Ainsworth is superbly positioned in a global gaming industry that has high regulatory barriers to entry. It has attractive foreign growth prospects and its intellectual property and patent portfolio might be worth more than the market realises. Macquarie Equities Research has a 12-month share price target of $4.30.