SwingTrade Member Forum

[Rawnoc]

GAXC thoughts as of 10/20/10....

(1) GAXC has a profitable and consistent ATM business. They are copying CSTR's Red Box with their own version called Instaflix. Rollout has been pretty good so far for this tiny company. Speculation that it will accelerate and the Instaflix business will grow and make the whole company much more profitable as each individual Instaflix, on average, is profitable. Like CSTR's coinstar kiosks, GAXC already has business relationships for their ATMs so they know how to get customers interested in their Instaflix.

(2) In the mean time, the balance sheet is pretty good and the share price is trading for less than book value and less than tangible book value making the risk/reward ratio a no-brainer long term IMO even if the speculation on the DVD biz fails to bear as much fruit as expected the ATM business alone is worth more than the current share price IMO.

(3) GAXC wild card -- only a matter of time before the industry thinks of another self-serving kiosk idea.

(4) Key PR:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=55716485

This 300 kiosk order was expected to have $7M in revenue in 2011.

Core business (ATMs) last quarter earned around +.025 EPS if you back out the DVD business. DVD business startup costs had a -.02 loss. Soon the DVD business will be profitable and growing IMO then the bottom line net income will be huge in relation to the stock price.

(5) Running some guessing numbers, I think they could do EPS of between +.10 and +.25 next year. That ASSumes the ATM business will do +.10 EPS (did +.025 EPS last Q) and the DVD business will be anywhere from break-even to +.15 EPS. PE of 15 = target of $1.50 to $3.75.