Poker player shows its hand
EBet is an Australian company that develops and monitors gaming systems for poker machines used in clubs and pubs. Like the track records of the punters eBet's software systems service, the company's on-market performance has been highly volatile.
It reached an all-time high of $8.25 way back in the March quarter of 2000, as shown on this week's quarterly chart produced by Mark Umansky, a certified financial technician and councillor with the Australian Technical Analysts Association.
Then, as the tech boom busted, eBet's share price went into a volatile and, ultimately, cataclysmic decline, finally bottoming in the December quarter of 2008 amid the gloom of the financial crisis at 49.5¢. That represented a loss for investors of 94 per cent from the 2000 highs.
eBet then made a remarkable recovery from the depths of the GFC to climb to $1.38 in the June quarter of 2010, bettering the general market. That recovery proved short-lived as the $1.38 mark turned out to be a major resistance level . Sellers kicked in, pushing eBet back to near its all-time lows late in 2011.
However, strong buying support in the professional market kicked in at about 54¢ in the December quarter of 2011. That support has proved resilient and has pushed the stock up through the old $1.38 resistance line. Indeed, that support continues to look strong, with the chart showing a higher low and a higher high after breaking through $1.38, a bullish sign for technical analysts. eBet has now run up through the initial target level for the breakout of $2.25 and is now at levels not seen since before the GFC, in 2007.
Should the buying continue, the stock may test its all-time highs, Umansky says. However, those levels are a long way off and investor sentiment can change.
On the fundamental front, eBet is trading on a price-earnings ratio of 7.6 times, well below the market average of 12.68 and the average for its sector of 16.5. It has a market capitalisation of $36 million and, despite its big-dipper ride, has returned investors 25.4 per cent a year over five years.
The company's business is multinational, with operations in Australia, New Zealand, Malaysia, the Philippines, South Korea, Vietnam, Cambodia and Singapore. It has an online wagering division in the US and exclusive distribution rights to WMS poker machines in NSW.
The company recently announced a maiden dividend of 3.5¢ franked to 50 per cent and an after-tax profit of $2.72 million, up 34 per cent.
This column is not investment advice. email@example.com. The writer has eBet shares.
Fall of the cards