Australian Gaming stocks look set to move higher on increased seasonal interest and improved market conditions.
The three names we prefer in the gaming sector are: TAH, SGR and CWN.
Our ALGO engine triggered a buy signal in CWN on September 28th at $11.10. The company has gotten some bad press relating to machine tampering, but has rebounded as the accusations are being dismissed as “political fanfare.”
Our medium-term target on CWN is $12.75.
Shares of TAH have been firming off the $4.00 support area as the long-awaited merger with TTS enters the home stretch.
It’s widely believed that the government would like to consolidate corporate bookmaking and this merger would achieve that goal.
Our medium-term target for TAH is $5.25.
SGR is more of a technical play. After breaking out of a “triple top” pattern at $5.30 yesterday, the share price now has a upside measured target of $6.00.
The Australian Competition Tribunal has approved the proposed merger of TAH and Tatts Group (TTS), on the basis that they are satisfied that the merger will result in substantial public benefits and on the condition that TAH divests its Odyssey gaming business.
We see scope for upside in TAH share price as a result of synergy cost savings and the prospect of a large scale share buy back program in 2018.