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Vegas, baby!


As yours truly gets ready for some 'Ville related wheeling and dealing and a much needed week of skiing, Daisy is flaunting her new bikini and other Hott Topic (HOTT) / Macke-style apparel (visual), as she preps for a quick hop to the city that never sleeps: Las Vegas. Lest Minyans start thinking less of her professional skills (no, the other skills) she'll be doing a little market research for me into a very under the radar gadget that's changing the sounds of gambling: the ticket-in ticket-out (TITO) slots. They are the new rage among casino operators because they cut down drastically on maintenance costs, allow for better tracking of players habits, and make it harder for aunt Fannie to rob Peter of his coins as he drunkenly flirts with our bovine diva.

Transact Technologies (TACT) is one of two manufacturers and suppliers of TITO slot printers and lottery ticket printers (the other is private), and rumor has it that business is humming. Racinos are sprouting faster than the next idea on how to fix Social Security (hint), and around the world the itch to gamble seems to be entering a new growth spurt.

TACT has another division that sells teller style printers to financial institutions. That's not business that keeps you awake at night with visions of early retirement, but it is approaching a refresh cycle; fast food chains are beginning to use these gadgets for cashless transactions (as if they needed to make it easier for me to bite a chunk off of Hoofy); and it creates a steady stream of supplies business (razor/blade model).

For this year EPS will likely come in at around $0.55 (113% Y/Y growth) and estimates for next year are for $0.74 (37% growth); free cash flow might get closer to $1.00. The balance sheet is thin - no debt, but very little cash for now. Also, insiders have been doing some selling, but at somewhat higher prices. And lastly, pet-peeve, I wished management returned my messages, but nothing yet.

On the T/A side of the page, TACT has one of the most interesting charts I have seen in a while. While both the 200/50 DMA are on top of the price right now, all the recent big up days have been on volume spikes. The narrowing range of the triangle suggests the stock is coiling. Whichever way it breaks, the move could be very sharp. Pure gut feel, I think it will be sharper if this breaks to the upside.

Never advice fellow Minyans, just offering up the "ducks".

position in TACT
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