Inside Wall Street
HITTING THE JACKPOT OVERSEAS?
If you think the gambling stocks have peaked, you may be wrong. The pros continue to snap up gaming shares, and now they are zeroing in on International Totalizator Systems, a manufacturer of computerized lottery and horse-race wagering systems, which was discussed in this column in May, 1992, when it was trading at 41 2. Now at 11, some investment pros insist the stock is just starting to gain upward momentum.
Totalizator is big in developing and managing national lottery systems in foreign countries. "The market for lotteries overseas is huge," says Charles LaLoggia, editor and publisher of Special Situation Report. Russia and China are now emerging as Totalizator's new major markets, he says.
Chairman Jim Walters told shareholders that Totalizator has begun shipping 1,000 lottery terminals to the Jilin province of China. The company has also gotten a 17-year license to help operate and expand the Russian lottery system. Walters said the Russian lottery will have 1,000 Totalizator terminals by 1994; The company's goal is to install 40,000 units in Russia alone by 1996. The company has over 30,000 lottery and horse-race wagering terminals in 18 countries, including Australia, Britain, the Dominican Republic, Norway, Sweden, and Hong Kong--the latter being Totalizator's biggest market so far.
A Smith Barney Shearson portfolio manager believes the stock "will be 30 in two years." Berjaya Lottery Management, a gaming subsidiary of Berjaya Group Berhad located in Malaysia, apparently agrees: It raised its stake to 40% on Oct.7. Berjaya is bidding to get various licenses to operate lotteries in the Pacific Rim, especially in China, notes this pro. GENE G. MARCIAL