Both major business segments are recurring-revenue based, so PGIC earns money on the initial sale but also receives daily royalties. It's a very, very high margin business.

The first and most important ingredient in any stock is senior management, led by the Chief Executive Officer. The CEO of PGIC is Russell McMeekin. Russell is a brilliant, focused executive. He joined in August 2002 and found he had a lot of issues and situations that needed fixing. PGIC was primarily a hardware company draining cash and making lousy margins. He inherited a fat debt-load as well which he is bringing down.

Russell decided the future of PGIC was based in a "software model" with a recurring revenue stream. He has re-positioned his company these past five years; has had to manage through growing pains and the laborious, time-consuming process of getting products approved by the various gaming commissions worldwide. Russell has managed to juggle all of these complex tasks near flawlessly. He has done an incredible job of managing Wall Street analysts and institutional portfolio managers as well, while re-engineering the company's business model, which has been no easy task. Russell has earned his stripes!

PGIC is poised to begin serious profitability here in the 4th quarter of 2006, not yet reported, ( per company guidance, it will be EBITDA positive for the 4th quarter) and all of 2007 and beyond. The pieces are in place and the internal investments in people, product and performance are completed as well. PGIC will finish calendar 2006 with revenues of about $75 million and an earnings per share (EPS) loss of $.80. The numbers for 2007 become explosive with revenues expected in the $105-110 million range and EPS of $.18-.20.

The operating margin, the key, ultimate component to any investment, will approach 14% in 2007 from a negative 2006 number. The operating margin will go even higher in 2008 and should settle in the low 20s%.

The best this company could have counted on for operating margins when it was hardware- based was 3-4%. Wall Street would have never paid attention to PGIC with these numbers. Russell McMeekin has elevated this company to be one of the most respected vendors in the gaming industry. Casino/gaming companies want and will pay for only the best technology.

PGIC's customer base is the Who's Who of the casino world, MGM, Wynn Resorts, Crown Casinos, etc.

The price target for PGIC is $14-16 by year end 2007. As I mentioned, 2007 and beyond will see a continued growth rate of 40-45%. The market capitalization of PGIC is currently $325 million with the potential to exceed $1 billion. The story is just becoming known and you will see many brokerage firm research departments hop on the bandwagon. Like I said , the perfect storm is forming...

Georges Yared is the author of "Baby Boomer Investing...Where do we go from Here?" and "Stop Losing Money Today." For more info on both books go to http://www.georgesyared.com