Poker, anyone? The game has come into America's living rooms
through the World Poker Tour show, produced by WPT Enterprises (WPTE )
and aired on the Travel Channel. Poker on TV isn't the only way to play
the game. Some big investors are betting on WPT stock. On Nov. 10 the
stock jumped more than 10%, to 9.95, on heavy volume after CEO Lyle
Berman presented an upbeat outlook at a small-cap conference in New
York. Mario Gabelli, who heads Gabelli Asset Management (GBL ), owns
shares. "It's a smart bet," he says, on a young gambling outfit. Poker's
popularity is gaining, he adds, in part because of the televised tours,
which produce most of WPT's revenues. The tours have the potential to
become a big hit in casinos and on the Internet, says Gabelli. He warns
that WPT is a speculative bet, and investors "should not go all in."
Dennis Nielsen of investment firm Feltl, which took WPT public in August
at 8 a share, rates it speculative buy. WPT is expanding the World Poker
Tour concept into a brand, he says, to produce revenues not only from
licensing but also from sales of poker products, and corporate
sponsorships. This year, he sees WPT earning 4 cents a share on sales of
$14.6 million and 8 cents in 2005 on $18 million, vs. a 4 cents loss in
2003 on $4.3 million. Although WPT sports a rich price-earnings ratio,
it has potential for rapid growth -- plus the cash to capitalize on
varied opportunities, says Nielsen.
