Poker player shows its hand
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. rodmyr@gmail.com. The writer has eBet shares.
Fall of the cards
Frequently Asked Questions about this Article…
eBet is an Australian company that develops and monitors gaming systems for poker machines used in clubs and pubs. According to the article, it operates across Australia, New Zealand, Malaysia, the Philippines, South Korea, Vietnam, Cambodia and Singapore, has an online wagering division in the US, and holds exclusive distribution rights to WMS poker machines in NSW.
The article describes eBet's on-market performance as highly volatile. eBet reached an all-time high of $8.25 in the March quarter of 2000, fell to a low of 49.5¢ in the December quarter of 2008 (about a 94% fall from the 2000 high), recovered to $1.38 in June 2010, and has since broken through that resistance and run up to initial breakout targets around $2.25.
Technical commentary in the article notes buying support around 54¢ in December 2011, a subsequent higher low and higher high after breaking the $1.38 resistance, and a run through an initial breakout target of $2.25 — a bullish pattern technical analysts would welcome. The article cautions investor sentiment can still change, so past momentum isn't a guarantee of future gains.
Fundamentally, the article reports eBet is trading on a price-earnings ratio of 7.6 times, below the market average of 12.68 and its sector average of 16.5. The company has a market capitalisation of about $36 million and the article states it has returned investors 25.4% per year over the past five years.
Yes. The company announced a maiden dividend of 3.5¢ per share franked to 50%, and reported an after-tax profit of $2.72 million, up 34% year on year, according to the article.
The article notes that if the buying continues, the stock may test its all-time highs, but also warns those levels are a long way off and investor sentiment can change. That reflects a cautious technical-upside view rather than a guarantee.
Based on the article, key risks include the company’s history of large share-price volatility, sensitivity to shifts in investor sentiment, and the long gap between current levels and the 2000 all-time high. As with any stock, past performance and technical breakouts are not investment guarantees.
The article explicitly says it is not investment advice, and it discloses the writer owns eBet shares. Everyday investors should do their own research or seek advice before acting on the information.
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