Stock performances of major gaming equipment manufacturers continued to trend upward during the first month of 2012 as business confidence and selected economic indicators improved. The broader equities markets responded to positive consumer spending and job reports in January. The Dow Jones Industrial Average climbed 3.4 percent during the latest month, while the S&P 500 closed up nearly 4.4 percent, and the NASDAQ Composite soared more than 8 percent during the same timeframe.
Although overall growth in the AGEM Index did not mirror those posted in the larger markets, 13 of the 16 global gaming suppliers reported gains in their stock valuation during the month of January. With 20 days of trading in the first month of 2012, the AGEM Index reached a composite score of 117.50, representing an increase of 1.23 points, or nearly 1.1 percent from the prior month.
For comparison purposes, the AGEM Index is up 12.5 percent from levels reported one year ago, but remains down 5.1 percent from its peak in the current cycle (October 2011). Valuations within the sector are likely to remain somewhat volatile, particularly as a broader economic recovery emerges and the quarterly earnings season continues for the next several weeks.
Selected positive contributors to the index during January 2012 included the following:
• Lottomatica (LTO) added 1.63 points to the overall index, sourced to a gain of 10.25 percent in its stock valuation.
• Aristocrat Technologies (ALL) posted a stock price gain of 11.36 percent, contributing 1.47 points to the overall index.
Selected negative contributors to the index included:
• Konami (KNM) recorded a stock price decline of 11.29 percent, removing 2.74 points from the index.
• International Game Technology (IGT) witnessed its stock price dip by 7.38 percent, resulting in a negative contribution of 2.30 points to the overall index.
Gaming markets have continued to emerge domestically and abroad over the last decade, as various types of casino gambling have entered nearly every major populous. Recent legislative action in some of these new markets has generated significant interest on the part of operators, including activity in the Massachusetts market. Although the state of Massachusetts is still in its early stages of determining gambling license approvals, casino operators have their foot on the gas pedal in what will likely provide a significant opportunity for global gaming manufacturers. The chart below highlights development progress by those reportedly exploring the northeastern gaming market.