Inside Wall Street

GAMING LOTTERY: JUST THE TICKET?

With lotteries flourishing, investment adviser Richard Geist is betting on an outfit supplying tickets to their operators: Gaming Lottery (GLCCF). "It has the potential of becoming one of the largest gaming-supply companies in North America," says Geist. The stock hasn't been a wallflower: During the summer it doubled, from 4 to 8, but has since cooled a bit, to 71/2. Geist thinks it will heat up--and more than double--in a year.

What will propel this big move? The company, formerly Laser Friendly, is believed to be negotiating for two companies in the same business, which Geist figures would kick in $150 million in revenues and an extra 50 cents in earnings for the year ending Jan. 30, 1997.

Without the acquisitions, Geist reckons Gaming Lottery will post revenues of $46 million in fiscal 1996 (ending Jan. 31, 1996) and $87 million in 1997. He sees earnings of 37 cents a share in fiscal 1996 and 62 cents in fiscal 1997.

If, however, the two companies are acquired, 1997 will be a more robust year for Gaming Lottery: Geist says revenues will shoot up to $237 million and earnings to $1.12 a share, vs. last year's 14 cents profit.

In the meantime, the company has signed a four-year, $31.7 million contract with Ontario Lottery Corp., Canada's largest, which sells $2 billion worth of tickets a year. Even without the acquisitions, says Geist, the stock is undervalued compared with its peers, which trade at 21 times next year's estimated earnings. Gaming Lottery's p-e: 11. "It's a very strong buy at this level," he says.By GENE G. MARCIAL