Despite Poor Results an Insider Increases His Bets on Bally Technologies (BYI)
Yesterday, Feb. 12th, Ramesh Srinivasan, President and Chief Executive Officer at Bally Technologies Inc. (NYSE:BYI), acquired 15,000 shares of Common Stock (par value $.10 per share). He paid a weighted average price of $67.55 per share, and now holds 105,936 shares, worth more than $7.1 million.
Bally Technologies Inc. (NYSE:BYI) is a mid-cap ($2.6 billion) designer, manufacturer, operator, and distributor of advanced technology-based gaming devices, systems, server-based solutions, custom mobile applications, and interactive applications. Despite its conservative long-term EPS growth projections, most analysts recommend buying this stock, mainly on account of its below average valuation (at 20x P/E, versus an industry average of 21.2x) and wide margins and returns –especially its ROE of 69.7%, versus an industry average of 16.7%.
Even in spite of its strong fundamentals, the stock price has been falling lately. Over the past 3 weeks, Bally Technologies Inc. (NYSE:BYI)'s shares dropped about 18%. It looks like Mr. Srinivasan took advantage of this attractive entry point to increase his position in the company, disregarding recently reported poor earnings and several downgrades (from research firms, like Janney Capital) that the company witnessed.
Actually, not only analysts and Mr. Srinivasan feel bullish regarding Bally Technologies Inc. (NYSE:BYI). Paul Reeder and Edward Shapiro’s Par Capital Management declared at the end of the third quarter holding more than 951,000 shares of the company. In addition, Dmitry Balyasny's Balyasny Asset Management upped its stake, and, at the end of the third quarter, reported holding more than 926,000 shares.Other prominent investor worth mentioning is Jim Simons (Renaissance Technologies) that holds 434,000 shares, after doubling his position over Q3.
On the other hand, Ken Griffin’s Citadel Investment Group, sold out its position in the company over the fourth quarter of 2013.
Disclosure: Javier Hasse holds no position in any stocks mentioned