Electronic Game Card, Inc (fka EGMIQ)

[boomerstock]

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We reiterate our Buy rating and $3-4 valuation range on EGMI. Revenue growth accelerated in 3Q09 (up 39% Q/Q) and our visibility into 2010 improved significantly. The core promotions segment remains a steady grower, and starting in 4Q09, new products (iQuiz and ePlay cards) in new verticals (edutainment and gaming) should contribute to revenue as well. Poken , China , lottery and other lottery opportunities in U.S. and Europe are not included in our 2010 expectations and we view these as valuable options imbedded in the stock. Regardless of the success of these, we believe that our current projections for 40% EPS growth in 2009 and 2010 justify higher valuation multiples and a $3-4 price per share valuation range.