NEW YORK, May 31 (Reuters) - Economic troubles at casinos should give investors pause about buying shares in gambling equipment maker WMS Industries, whose shares have doubled since early March lows, Barron's reported in its June 1 edition.
While everything is going well for the company, WMS shares are priced perfectly and any disappointment could knock them down 10 percent to 30 percent, Barron's reported.
The slot machine and video-lottery terminal maker has done well in fiscal 2009 in terms of earnings, but casinos are in dire shape, Barron's said. WMS growth will slow as casinos cut back on spending, according to SMH Capital analyst Charles Rareshide.
In addition, eight company insiders have sold more than 200,000 shares into the rally in the stock, it said.
WMS told Barron's that improving technology will lead to replacement sales and that more states might legalize gambling.
WMS attributed the insiders' selling to the limited windows in which they can sell. It also said it has 400 customers and only a handful are in trouble.
(Editing by Carol Bishopric) Keywords: WMS/ (Reporting by Caroline Humer; email caroline.humer@thomsonreuters.com; Tel: 1-646-223-6181) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
While everything is going well for the company, WMS shares are priced perfectly and any disappointment could knock them down 10 percent to 30 percent, Barron's reported.
The slot machine and video-lottery terminal maker has done well in fiscal 2009 in terms of earnings, but casinos are in dire shape, Barron's said. WMS growth will slow as casinos cut back on spending, according to SMH Capital analyst Charles Rareshide.
In addition, eight company insiders have sold more than 200,000 shares into the rally in the stock, it said.
WMS told Barron's that improving technology will lead to replacement sales and that more states might legalize gambling.
WMS attributed the insiders' selling to the limited windows in which they can sell. It also said it has 400 customers and only a handful are in trouble.
(Editing by Carol Bishopric) Keywords: WMS/ (Reporting by Caroline Humer; email caroline.humer@thomsonreuters.com; Tel: 1-646-223-6181) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.