Why Multimedia Games Is Poised to Keep Poppin'

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, machine gaming company Multimedia Games Holding Company has earned a coveted five-star ranking.

With that in mind, let's take a closer look at Multimedia Games, and see what CAPS investors are saying about the stock right now.

Multimedia Gamesfacts

Headquarters (founded)

Austin, Texas (1991)

Market Cap

$750.5 million


Casinos and gaming

Trailing-12-Month Revenue

$172.7 million


CEO/COO Patrick Ramsey

CFO Adam Chibib

Return on Equity (average, past 3 years)



$81.5 million / $31.5 million


Bally Technologies

International Game Technology

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 86%of the 90 members who have rated Multimedia Games believe the stock will outperform the S&P 500 going forward.

Earlier this week, one of those Fools, TMFInnovator, explained why the stock still has plenty of room to run:

Wall Street just can't figure this one out.

-MGAM soars 19% in April after crushing estimates once again ($0.31 reported vs $0.19 estimate). But this is nothing new. MGAM has beaten estimates by AT LEAST 38% in each of the past four quarters.

-Current estimates are still below company expectations ($0.83 2013 EPS analyst estimates, vs $1 company expectations). If $1/share does indeed happen in 2013, the stock is still pricey at $26 today. But earnings doubled in '11 and then quadrupled in '12, so the valuation isn't exactly unreasonable.

-The economy is improving, and the gaming industry should benefit from additional consumer discretionary income.

Though perhaps not a "buy and forget about it" company, I'm willing to make the bet that they outperform in the short-term.

If you want market-thumping returns, you need to put together the best portfolio you can. Of course, despite a strong five-star rating, Multimedia Games may not be your top choice.

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The article Why Multimedia Games Is Poised to Keep Poppin' originally appeared on Fool.com.

Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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