Electronic Game Card Inc. (EGMI) Will Find Its Legs
The Company heads to China today as they will be meeting with their China Welfare Lottery partner, China LotSynergy. In the next few weeks we should get some more transparency into this potential monster of a relationship. POKEN has been getting a lot of positive press lately (Forbes, etc). EGMI has been very quiet on the POKEN front, and I believe it is for a reason (a good one). I’m hoping whatever it is that’s being worked on comes to light in February. As someone that has seen the POKEN business plan, it is a potential game changer for EGMI. POKEN CEO Message My guess is we should also have a new CFO in the coming weeks as well as a set of new directors. With all the above going on, EGMI will find its legs and then some. When you look at comps, via Roth Gaming Supplier Report, if EGMI was trading at the average PE for their peer group, the stock would be $2.25/share. And when you take into account that EGMI has arguably the best balance sheet (working cap/current ratio/no debt) of the group, and growing much faster than the group average, EGMI remains very undervalued.
Disclosure: LONG EGMI
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I just wish we would hear something about Poken, I feel that this is one absolute monster of an opportunity. I can’t help myself but I keep thinking that something is going wrong and that’s why we have not heard anything. I read all the poken news and Poken website but I never hear EGMI mentioned and there are 6+ places already selling Poken.What are your thoughts on this Ian? Also I wonder about the proxy for the shareholders meeting. Hoping for some good news next week.
Rene:
Yeah I think we will hear something on Poken by end of Feb. The other websites sellings pokens via the US will be forced to buy there inventory from EGMI most likely. Not that big of a deal.
IC
Regardless, once the CFO and board are FINALLY announced, the stock will increase back to the industry average $2+. But really probably $3+ on any positive transparency on POKEN/CHINA.
IC
Ian,
What’s your opinion of the biggest risk or setback that poken or EGMI in general will have in gaining a competive moat? What is to stop cell phone developers from using the technology that poken has and implementing it into cell phones? I also question the ability for EGMI to replace the scratch off lottery with digital games, whats your thoughts on that?
Jon:
I’m the most excited about the next generation poken which isn’t out yet. Smaller, embedable etc..
It’s not a question of if but when on the replacing scratch off lottery. That is why China LotSynergy teamed with them in the first place.
IC
China lottery 75 bln yuan in sales in 2009 CCTV-International: http://bit.ly/6CqgWS
Ian,
Thanks for your opinion on that, just wanted to know what you saw as the biggest risk for EGMI, thanks.
Wow. I think you two just blew my mind. I liked the idea of Poken, but I don’t think the implementation they’re using will create a new industry. An embeddable version that could be put in a cell phone, though….wow. That would be a game-changer.