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[mick]

Galaxy Gaming (GLXZ)
http://www.otcmarkets.com/stock/GLXZ/profile

Verified Company Profile 5/10/2016
Contact Info
6767 Spencer Street
Las Vegas, NV 89119

Website: http://www.galaxygaming.com
Phone: [phone]
Email: [e-mail]
http://www.unusualstocks.net/members-only/2016/7/30/portfolio-shakeup-and-new-investment-announcement

Galaxy Gaming (GLXZ): (15% of portfolio) Galaxy Gaming is one of the leading casino table game companies in the world with a current installed product base of over 4,000 gaming tables within over 500 casinos, making the company the largest independent provider of proprietary table games in the world..

What if I told you that you could buy the company's stock at half the price now as compared to when the company had nearly half of its current revenue/profits and nearly double the debt? To make it even more enticing, it's gross margins are at roughly 95% and a significant portion of its revenues are recurring in nature ("recurring" in its own unique way because people are always gambling). And, perhaps the most enticing, the Founder/CEO owns over 60% of the company. But wait...there is more. Due to the very high gross margins, the company generates nearly $1M in free cash flows per quarter.

With roughly $11M in debt (down from over $21M several years ago), yet approximately $1M/quarter in free cash flows, the company continues to aggressively pay down it's debt which makes the company more valuable each and every quarter on that simple fact alone. Throw in a quarter like the company had in Q1, and you have a profitable operation that is growing at a very nice clip that is becoming closer and closer to being able to re-invest all of their cash flows into the business rather than having to funnel 90%+ of those cash flows into debt repayment.

The company has been very vocal about the fact they are aggressively looking to re-finance the remaining debt in a way that would allow them to immediately begin investing more into the business, so I suspect we should hear news on that front in the coming month or two. Based on my research and discussing with others, acquisitions within the industry take place between 6x-10x sales.

At that valuation GLXZ would be worth $2.50-$4/share.

The biggest risk with GLXZ, in my opinion, is the unknown about exactly how will the company allocate its free cash flow once it is able to do so at a more significant level? Can the CEO prove to be a great capital allocator? That is the "wager" (no pun intended) you are making with an investment into the company.