Gaming manufacturer's index slips in January

Feb 9, 2010 8:19 PM

by GT Staff |

A key indicator for gaming equipment manufactures took a slight nosedive in January, fueling concerns that the economic recession is showing no signs of recovery.

The AGEM (Association of Gaming Equipment Manufacturers) Index ended the month of January at 102.88, dipping 3.44 points or 3.23 percent from the previous month and falling back to a level not seen since July 2009.

Despite the drop-off, the AGEM Index has been consistent with the broader S&P 500 Index over the last few months, which also slid 3.7 percent during the month of January.

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However, it is important to note the extent of movement in the index relative to the latest downturn in the business cycle. The AGEM Index remains down 32.2 percent since it reached its zenith of 151.84 at the beginning of the recession in December 2007, but reversibly, it has gained nearly 55.2 percent from when it closed at 66.30 12 months ago.

While market confidence has edged upward from its lowest point, the timetable for valuations approaching pre-recessionary levels will be slowed by investor caution.

The global gaming suppliers’ ability to continue investing in innovation and diversification of new product lines while maintaining strong balance sheets will be key considerations going forward.

There were some positive results in January. Selected positive contributors to the index during the month include: (1) Global Cash Access (GCA) with the largest contribution, adding 0.26 points to the index based on a 8.14-percent increase in its stock price; and (2) Shuffle Master (SHFL) contributing 0.21 points with a 7.89-percent increase in its stock performance.

On the flip side, selected negative contributors to the index include: (1) INTRALOT S.A. (INLOT) with its stock price dropping 21.95 percent, contributing -0.93 points to the index; and (2) WMS Industries (WMS) posting -0.88 points to the index with a 7.30-percent decline in its stock valuation.

 

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