So far this year shareholders of gaming machine manufacturer Ainsworth Game Technology Limited (ASX: AGI) have not had much to shout about.
With the company recently reporting that full year profit was down 21% year on year to $55.7 million, it comes as little surprise to learn that its shares have dropped significantly lower in the last 12 months.
At the same time its industry rival Aristocrat Leisure Limited (ASX: ALL) has been having an incredible year. In its interim results that were released in May, Aristocrat Leisure reported a massive 105% increase in statutory net profit to $159.1 million.
Aristocrat Leisure's shares are up 77% over the last 12 months on the back of this strong performance, compared to the 22% decline in Ainsworth Game Technology's share price.
But with Ainsworth Game Technology's shares now changing hands at under 13x full year earnings and expected to provide a fully franked 4.9% dividend in the next 12 months, could now be a good time to gamble on its shares?
Whilst I wouldn't expect fireworks from the company, I do believe the strong growth of its international business will provide steady earnings growth for the next few years which could make it a good prospect for investors today.
International revenue grew 38% last year to $204 million, which means it now accounts for 71.5% of total revenue. This may get a further boost in the year ahead through its tie up with Novomatic.
Management revealed in its recent investor presentation that the early exploration of game library and co-operation in the key North American market has been encouraging.
I find this to be promising and look forward to the company providing a further update on its progress at its AGM. Traditionally the company holds its AGM in mid-November, so investors may want to hold off making an investment until then.
