For 25 years, Steven Halpern, editor of TheStockAdvisors.com, has surveyed the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is one of 100+ ideas in the Best Stocks for 2008 report.
"My top speculative idea for 2008 is International Game Technology (NYSE: IGT)," says Paul Tracy, editor of StreetAuthority Market Advisor.
"IGT is the world's leading slot machine manufacturer. In addition to basic slot machine design and sales, the company generates more than half of its revenues by leasing machines to casinos in exchange for a percentage of the net win.
"This gaming business provides the firm with a recurring stream of high-margin revenues. Thanks to steady expansion in recent years, IGT now draws income from about 60,000 machines installed throughout casinos in key gaming markets across the globe.
"With deep pockets and steady cash flows, the company has been able to spend nearly twice as much on research and development activities as its closest competitors. In a recent poll conducted by Casino Player magazine, seven of the top ten most popular video slots were introduced by IGT.
"IGT is also the mastermind behind what many predict to be the next great gaming industry product cycle, the introduction of server-based games. The idea is to have one giant computer control all the slot machines within the casino. This new technology allows the casino to cut down on labor, change games rapidly and monitor revenue in shorter time frames.
"Going forward, however, we believe the core North American market is poised to grow substantially over the next few years. Add to this the impact of strong international sales and growing gaming operations, and IGT's overall earnings are expected to increase at a healthy +14% annual clip going forward.
"With a commanding lead, a well-respected reputation, and a knack for developing games that resonate with players, IGT should remain the clear leader in this high-growth industry for years to come."
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