Insider Activity: Scientific Games Corp (SGMS)

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  • Shares of gaming technology company are down over 60 percent from 52-week highs.

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  • Billionaire investor Ron Perelman bought 120,000 shares of Scientific Games Corp (SGMS) on Wednesday, June 19th. The total cost came in at over $2.34 million. Perelman is already a director at the company, and also a 10 percent owner as well.

    The Las Vegas-based company develops technology related to the gaming industry, including physical gaming machines, video lottery systems, and related hardware and software.

    With data showing a slowdown in tourism to Las Vegas, and with gaming revenues down, shares of the company have been hit hard in the past year, down over 63 percent. Shares currently trade near $20, against a 52-week high of $54.

    With a company that’s barely been profitable and has over $10 billion in debt, it’s easy to see why shares have suffered.

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  • Action to take: Shares look like a bit of a gamble based on the company’s debt right now. However, buying heavily indebted companies and profiting from them is a classic Perelman move.

    Nevertheless, most investors may not have the patience to sit through the time it will take for such a trade to play out. Investors would be better served in one of the other gaming-related stocks with insider buys of late.