A Board Member Bought International Game Technology

Page 1 of 2

A Form 4 filed with the SEC shows that David Roberson, a former Hewlett-Packard Company (NYSE:HPQ) executive who sits on the Board of Directors of International Game Technology (NYSE:IGT), bought 12,000 shares of International Game’s stock on November 30th at an average price of $13.94 per share. Roberson now owns a little over 18,000 shares, so this was a big purchase in percentage terms. We think that company insiders should tend to avoid buying the stock, as it reduces their diversification and leaves them more exposed to company-specific risks, unless the insider- benefitting from having more knowledge of the business and the industry than the average investor- is very confident that the stock will outperform. This is our explanation for why stocks bought by insiders beat the market on average (read more about studies on insider trading). Our database of insider purchases at International Game shows that another Board member bought stock in November at an average price of $13.25. Since consensus insider buying is a particularly bullish signal, we think it’s a good idea to take a closer look at the provider of electronic gaming systems.

The company’s fiscal year ended at the end of September. International Game Technology reported that revenue had risen 10% from the last fiscal year, with the largest increase in sales coming in the small Interactive segment. This increase in Interactive was partly due to an acquisition. Operating income dropped 16%, but that was entirely due to acquisition related costs and an increase in impairment and restructuring charges. With research and development expenses being 10% of sales after increasing about in line with revenue, it looks to us like the core business is doing moderately well. The fourth quarter of the fiscal year reflected a particularly impressive improvement from a year earlier, with revenue and earnings each increasing by over 15%.

SAC CAPITAL ADVISORS

At a market capitalization of $3.9 billion, International Game trades at 17 times trailing earnings. As we’ve noted its earnings have been brought lower in recent quarters by what should not be ongoing charges, so net income would be expected to improve going forward. Wall Street analysts agree with this logic, as consensus earnings for the current fiscal year are $1.21- a sizable increase, and implying a current-year P/E of 12. If the company turns out to be on track to reach that figure, we’d consider it as a value stock as the core business would need only modest growth to justify that valuation.

Page 1 of 2

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Click here to Read Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 74 percentage points in 2.5 years. Our beta is only 1.2 (download a FREE newsletter and see the details inside)

Lists

Best Selling Magazines in the World

Shortest People in History

The Most Celebrated Holidays in the World

Most Expensive Handbag Brands in the World

Top Selling Comic Book Issues of this Century

The Most Powerful Women in Politics

Best Paid DJs

Most Rebellious Female Artists

Best Paid TV Actresses of 2014

Best Paid Actors of 2014

Most Expensive Horses in the World

Tallest People Ever

Most Encouraging Feminist Celebrities

Best Paid Supermodels of 2014

Top 10 Suburbs for Retirement in 2015

10 Wealthiest Cities in America

Top 10 TED Talks for Entrepreneurs

Best TED Talks on Education

25 Most Dangerous Places to Live in America

Top 10 Ski Resorts in the United States – 2014 List

Top 10 Most Remote Places in the World

Most Visited Museums in the United States

Wealthiest Photographers in the World

Most Famous Gay Athletes

The World’s Most Famous Circuses

Best Hair Stylists

Most Popular NASCAR Drivers

The Best Romance Movies of all Time

The Most Wanted Drug Lords

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!