Stock index for gaming manufactures continues to slump

Stock index for gaming manufactures continues to slump

July 08, 2010 8:55 AM
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The AGEM stock index for gaming equipment manufacturers plummeted by double digits in June, the second straight month of double-digit declines.The AGEM stock index for gaming equipment manufacturers plummeted by double digits in June, the second straight month of double-digit declines.

The Association of Gaming Equipment Manufacturers (AGEM) Index, a composite of 17 global gaming suppliers, slipped 14.69 points in June to close at 88.89.

The move represented the largest monthly decline in 20 months.

By comparison, the Dow Jones Industrial Average and Standard and Poor’s 500 Index were down 3.6 percent and 5.4 percent, respectively.

Analysts suggest a lack of confidence across global markets continues to impact casino expansion.

Following weaker-than-expected reports in labor and consumer spending, investors took a step back to reevaluate their positions as the pace of recovery is not moving as fast as predicted.

Investment banks are doing the same with Goldman Sachs downgrading several global gaming suppliers to "sell" from "neutral," indicating that revenue from replacement equipment will be relatively slow and that no material pickup in the market will occur in the near term.

Three positive contributors to the index during the month included:

• Astro Corp. (3064) posting 0.13 points to the index with a 15.2-percent increase in its stock valuation.

• Gaming Partners International (GPIC) reporting a 16.0-percent gain in its stock price, contributing 0.05 points to the index.

• Wells-Gardner Electronics (WGA) posted a stock price rise of 15.53 percent, adding 0.02 to the index.

The gaming manufacturers with the largest June declines include:

• International Game Technology (IGT) witnessing its stock price fall 19.78 percent, contributing -5.77 points to the index.

• Bally Technologies (BYI) contributing -2.65 points to the index with a 23.79 percent decline in its stock price.

The Association of Gaming Equipment Manufacturers (AGEM) produces the monthly AGEM Index that comprises 17 global gaming suppliers throughout the world. A total of 12 suppliers are based in the United States and are listed on the NYSE, Nasdaq, or AMEX, while two trade on the Australian exchange, one supplier trades on the Athens exchange, one trades on the Milan exchange, and another trades on the Taiwan OTC exchange.

The index is computed based on the month-end stock price (adjusted for dividends and splits) of each company and weighted based on approximation of market capitalization. Market capitalizations for manufacturers trading on foreign exchanges have been converted to US dollar-equivalents as of month-end for comparability purposes. The AGEM Index is based on a 100- point value as of January 2005.

The AGEM index and overview is prepared by Applied Analysis (AA), a Nevada-based advisory services firm providing consultation services for public and private entities. The company utilizes extensive experience in economics, information technology and finance to provide a wide range of services, including urban economic consulting, financial advisory services, market analysis, public policy analysis, hospitality industry and gaming consulting, and information system and technology consulting.