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Neil Barsky Loves to Gamble

By Stansberry Research Interview Series
Wednesday, July 19, 2006

It’s become almost ridiculously predictable...
 
In anticipation to a period of rising stock prices, insiders are loading up on gaming and casino stocks.
 
Every year for the last three years, gaming stocks have staged impressive rallies during the fourth quarter. Of the dozens of charts I’ve looked at in this sector, each and every one exploded upwards in October time and time again.
 
It makes sense... gambling companies enjoy their strongest business in the summer. So October would find us in the midst of earnings announcements for the industry. It also presents buyers with an excellent time to purchase in anticipation of next year’s summer season.
 
Of all the gaming companies out there, few can hold a candle to International Game Technology (IGT) when it comes to chart patterns or insider buying.
 
Based in Reno, Nevada, IGT designs slot machines and other casino-style gaming devices. With a $22 billion market cap and annual sales of $2 billion, it’s a heavyweight in the industry. And 54% of these sales come from spinning reel, and other video screen gambling devices.
 
And as you can see, October has heralded massive jumps in shares price for IGT shareholders in 2003, 2004, and 2005:
 
International Game Tech - October Rally
 
Among those taking massive profits from those rallies was Director Neil Barsky.
 
In September 2005, Barsky bought $65 million worth of IGT’s stock for his investment fund, Alson Capital Partners. Within one month, his investment was already up 33% to $86 million
 
It looks like Barksy’s doing the same thing this year. Last month Barsky exercised options to buy 64,000 shares of IGT’s stock, worth some $2.2 million. And he also bought an additional 300,000 shares for Alson partners, valued at $10 million.
 
Somehow I don’t think he’s gambling here.
 
Good trading,
 
Graham




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Market Watch
Symbol Price
Change
52-Wk
S&P 500 1221.53 +1.3% +10.1%
Oil 37.77 +1.5% -2.8%
Gold 135.20 -0.1% +13.4%
Silver 27.93 +0.4% +47.9%
US-Dollar 80.67 -0.8% +8.1%
Euro 1.32 +0.6% -12.1%
Volatility 19.39 -9.2% -8.2%
Gold Stocks 564.53 +1.3% +10.6%
10-Year Yield 3.00 +1.4% -9.6%

World ETFs
Symbol Price
Change
52-Wk
USA 122.56 +1.3% +10.2%
Canada 30.44 +1.3% +13.8%
Russia 21.63 +2.3% +16.7%
India 37.73 +1.9% +20.0%
Israel 16.47 +0.9% +9.7%
Japan 10.58 +1.0% +7.4%
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S. Africa 70.85 +3.9% +22.9%
China 45.06 +1.4% +0.1%
Lat.America 52.82 +1.4% +6.7%

Sector ETFs
Symbol Price
Change
52-Wk
Oil Service 136.18 +1.5% +14.8%
Big Pharma 64.13 +0.6% -3.3%
Internet 72.13 +0.7% +22.3%
Semis 16.03 +2.1% +28.9%
Utilities 31.21 +0.3% +1.6%
Defense 18.51 +1.3% +10.1%
Nanotech 9.99 +1.3% +0.0%
Alt. Energy 9.95 +1.4% -4.4%
Water 18.31 +1.1% +12.2%
Insurance 16.07 +1.2% +18.3%
Biotech 20.58 +1.1% +27.1%
Retail 19.65 +0.1% +28.4%
Software 24.59 +0.9% +24.1%
Big Tech 53.73 +1.0% +21.9%
Construction 12.99 +2.1% +13.3%
Media 13.57 +1.1% +25.0%
Consumer Svcs 67.26 +0.8% +23.3%
Financials 54.87 +2.4% +5.2%
Health Care 64.22 +0.7% +1.3%
Industrials 63.25 +1.6% +19.7%
Basic Mat 73.57 +1.6% +21.6%
Real Estate 55.24 +1.4% +23.8%
Transportation 91.17 +1.4% +25.6%
Telecom 22.48 +1.1% +17.1%