09-13-2018: Scientific Games Corporation (SGMS): Eaten Alive by Competition

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Scientific Games Corporation

We have often said that operating a casino is like having a license to steal. There are so many people addicted to gambling, even when the payout is 85% or less, that house odds should guarantee a profit to casino owners. Along with them, are the manufacturers of casino equipment such as slot machines, gaming tables, computer software, and the like. So why are quite a few of these companies not doing so well, losing money, or suffering? The answer appears to be competition, not only for the casino operators, but spilling over to equipment suppliers. Scientific Games Corporation, (SGMS) which has been around for quite a long time since the days of pinball machines and one-armed bandits, is one of the victims of competition spillover. Even though it is associated with big slot machine maker names like Bally, WMS, and the like, it has been consisting losing money for quite a few years.

Competition can take several forms for advantage, such as location, proximity to major metropolitan areas, and payout to customers.

In searching for a stock to review, we decided to look for a short sale candidate, and this appeared to be one, at firs, anyway. The chart pattern was certainly negative during a bull market. But in years back investors made a lot of money on this stock before the fall. It seemed like that was true even after the corporation was well into many quarters of losing money. Perhaps the "crowd" finally got onto it and decided it was going nowhere. However, as we look at quite a few of our indicators in which this stock behaved very abnormally, there appears to be a possibility of a short squeeze coming up. When everybody is line up on the short side, sudden up moves can start an avalanche of short covering. That is a fear shorting this stock for quite a few reasons, we will attempt to elaborate here.

The corporation operates in the manufacture and sale of slot machines, software for same, tables, and state lottery equipment and management. But looming on the horizon and dominating the news is the legislative approval to allow formerly illegal sports betting. It is for sports betting that this corporation is positioning itself as a sort of "white hope."

The corporation has issued a large number of junk bonds, quite a few of which don't pay anything. Its debt'equity is unacceptably low as is the Zenith Index indicating very poor fundamentals. It as projected negative p/e's and return on assets, and a high negative book value per share. Even though the corporation has been around for such a long time, the stocks appear to be junk.

It is run inefficiently, will never pay a dividend, and cumulative losses have eaten deeply into the balance sheet. Nevertheless the corporation keeps borrowing and has been on an acquisition trail to try to bolster earnings. We find some real anomalies here.

Institutions are heavy net acquirers. What is it that they see? There is insider buying on this stock, which is a rarity among all American corporations today. What do insiders know? NO researchers favor this stock, which is very rare they all agree, nor do the "gurus," but analysts are projecting positive earnings next year and also a $40/share target price, up from around $25 now. What is it that they see?

Not all chart indicators are negative. The MACD Histogram divergence for example is positive (an indicator used by Alexander Elder, author of "How to make a living in the stock market."

Other anamolies are that there are no reported salaries or perquisites for management. Are they working for free? Or is this just bad accounting, as indicated by GMI Analyst in the "Research" section of this report, which sees this corporation as having worse accounting than 98% of all other stocks. Credit Suisse spent a much more in depth time and effort reviewing this corporation, which was fascinating to them, and came up with an "underperform" assessment (which is unusual for them.)

For quite some time the stock looked like a rolling or channeling stock, until it made a breakout to the downside. But it has had a few blips up around 3% at the open recently.

The stock is getting some support from neural network and time series predictions. Even our "ultimate systems" are net positive. Are we too late shorting?

The answer is that if, "The trend is your friend," this stock appears to be headed further down. If the market as a whole turns, this stock will surely go down faster with it. It might help balance out late long positions in other stocks.

We feel pretty confident this stock will eventually go lower, as "the cat is out of the bag" on the future potential of this stock, the victim of a lot of competition. 



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Zenith Index

Under current market conditions, a Zenith Index Score of 1.20 or above is required for a positive rating on this factor. 1.21 -1.30 is considered acceptable, 1.30-1.40 is considered strong and
> 1.40 is considered exceptionally strong. Accounting statements in this section often contain mistakes, especially in earlier years' totals, but data is deemed sufficient for us to give a rating. More accurate financial statements follow in the next section.

Scientific Games Corporation (SGMS)                       Exchange: Nasdaq
6601 Bermuda Road
Las Vegas, NV 89119              Sector: Consumer Cyclical
United States                    Industry: Gambling

Scientific Games Corporation develops technology-based products and
services, and related content for the gaming, lottery, and interactive
gaming industries worldwide. The company's Gaming segment sells new and
used gaming machines, electronic table systems, video lottery terminals
(VLTs), conversion game kits, and spare parts; slot, casino, and
table-management systems; table products, including shufflers; and
perpetual licenses to proprietary table games. It also leases VLTs and
electronic table games, game themes, or other licensing arrangements;
and provides installation and support services for casino management
systems, such as ongoing hardware maintenance and software upgrade
services. The company's Lottery segment designs, prints, and sells
instant lottery games, as well as offers instant game-related services
comprising game design, sales and marketing support, and inventory
management; and provides lottery systems, including hardware, software,
and instant game validation systems. It is also involved in supplying
player loyalty programs, as well as providing merchandising services and
interactive marketing campaigns; and sublicensing brands for lottery
products, as well as providing lottery-related promotional products. In
addition, this segment provides software, hardware, and related services
for lottery operations, including draw systems, instant ticket
validation systems, and sports wagering and keno systems; and lottery
systems software maintenance and support services. The company's
Interactive segment operates social casino-style, slot-based, and
bingo-based games through Facebook, iOS, Android, and various other
desktop and mobile platforms; and provides content through remote game
server technology, to licensed online casino operators on desktop and
mobile platforms, as well as play-for-fun and play-for-free white-label
gaming for land-based casinos. Scientific Games Corporation was founded
in 1984 and is headquartered in Las Vegas, Nevada.

Last Trade:  26.70                           52-Week Range:  62.80 -  25.30
Employees: 8,600                             Avg.Volume:   1,418,628 Shares

Corporate Governance:
Pillar scores are Audit: 2; Board: 9; Shareholder Rights: 5; Compensation: 4.
         (A lower number means less governance risk.)

EPS: -3.44    Dividend Amount: $ 0.00          Yield:  0.00%
             Ex-Dividend Date: N/A             Payout Ratio:   0.00

Key Statistics:

    Trailing P/E:   0.00              Forward P/E (est.):  38.41
                                           Target Price:  47.63

Qrtly Stock Price Growth (yoy): -27.54%               Beta:   1.49
Qrtly S&P Index   Growth (yoy):  10.20%        Short Ratio:   3.62%
    Qrtly Revenue Growth (yoy):  15.25%         Shares Out:  91430000
   Qrtly Earnings Growth (yoy):   0.00%

          Book Value: -24.82                    Debt/Equity:   0.00%
    Price/Book Value:   0.00        Operating Profit Margin:  14.91%
         Price/Sales:   0.75                  Profit Margin:  -9.54%
         Market Cap:   2,423,000,000       Return on Equity:   0.00%
    Enterprise Value:  11,260,000,000      Return on Assets:   4.12%

    Operating Cash Flow:    360,000,000
         Free Cash Flow:     90,390,000



Annual Income Statement:                          (All numbers in thousands)
  Period Ending                             12/31/2017  12/31/2016  12/31/2015

  Total Revenue                              3,083,600   2,883,400   2,758,800
  Cost of Revenue                            1,164,600   1,106,300   1,068,600
  Gross Profit                               1,919,000   1,777,100   1,690,200

Operating Expenses:
  Research & Development                       184,100     204,800     183,900
  Selling, General & Administrative            605,800     579,200     567,700
  Non-Recurring Expenses                             0           0           0
  Other Operating Expenses                           0           0           0
  Total Operating Expenses                   2,637,300   2,624,200   2,553,700

Operating Income or Loss                       446,300     259,200     205,100

Income from Continuing Operations:
  Total Other Income/Expenses Net             -674,100    -737,900  -1,899,300
  Earnings Before Interest & Taxes             446,300                259,200  E
arnings Before Interest & Taxes             205,100
  Interest Expense                            -609,700    -661,400    -664,900
  Income Before Taxes                         -227,800    -478,700  -1,694,200
  Income Tax Expense                            14,500    -125,000    -299,900
  Minority Interest                                  0           0           0

Net Income from Continuing Op.s               -242,300    -353,700  -1,394,300

Non-recurring Events:
  Discontinued Operations                            0           0           0
  Extraordinary Items                                0           0           0
  Effect of Accounting Changes                       0           0           0
  Other Items                                        0           0           0
  Net Income                                  -242,300    -353,700  -1,394,300
  Preferred Stock & Other Adjustments                0           0           0

Net Income Avail to Common Shares             -242,300    -353,700  -1,394,300



Annual Cash Flow Statement:                   (All numbers in thousands)
  Period Ending                         12/31/2017    12/31/2016    12/31/2015

  Net Income                              -242,300      -353,700    -1,394,300

Operating Activities:
  Depreciation                             529,500       575,000       559,100
  Adjustments to Net Income                 88,200       -29,700       913,200
  Changes in Accounts Recv'bls             -48,000        30,000        26,400
  Changes in Liabilities                    64,500        14,700         4,600
  Changes in Investories                    -2,200         2,500        29,300
  Changes in other Oper'g Acts             -35,900        21,300       101,500

Total Cash Flow f Operations               507,100       419,000       414,200

Investing Activities:
  Capital Exenditures                     -293,700      -272,900      -323,600
  Investments                              -73,200        24,100        36,000
  Other Cash Flows fr Investing              2,500         4,100        11,200

Total Cash Flows from Investing           -414,600      -228,000             0

Financing Activities:
  Dividends Paid                                 0             0             0
  Sale of Purchase of Stock                      0             0             0
  Net Borrowings                           701,000      -139,700      -141,300
  Other Cash Flows fr Financing           -111,300       -50,200        11,200

Total Cash Flows from Financing            580,200      -196,000             0

  Effect of Exchange Rate Chg                    0             0             0

Change in Cash & Cash Equiv.                -4,900       -10,300             0



Annual Balance Sheets:                              (All Numbers in Thousands)
  Period Ending                          12/31/2017    12/31/2016    12/31/2015
Current Assets:
  Cash & Cash Equivalents                   788,800       115,100       128,700
  Short Term Investments                          0             0             0
  Net Receivables                           684,400       620,400       654,800
  Inventory                                 243,100       242,300       248,500
  Other Current Assets                       29,000        31,200        36,900
  Total Current Assets                    1,745,300     1,009,000     1,068,900

  Long-Term Investments                     253,900       179,900       228,500
  Property, Plant & Equipt                  568,200       612,200       794,000
  Goodwill                                2,956,100     2,888,400     3,013,700
  Intangible Assets                       1,944,000     2,177,400     2,405,900
  Accumulated Amortization                        0             0             0
  Other Assets                              126,700       112,900       114,600
  Deferred LT Asset Charges                       0             0        20,700

Total Assets                              7,725,300     7,087,400     7,732,200

Current Liabilities:
  Accounts Payable                          190,400       188,900       159,800
  Current Portion LT Debt                 8,776,800     8,081,100     8,218,900
  Other Current Liabilities                  97,700        74,700        47,500
  Total Current Liabilities               9,064,900     8,344,700      8,426,200

  Long Term Debt                            190,400       188,900       159,800
  Other Liabilities                       8,776,800     8,081,100     8,218,900
  Deferred LT Liab. Charges                  97,700        74,700        47,500
  Minority Interest                               0             0             0
  Negative Goodwill                               0             0             0

Total Liabilities                        18,074,400    16,675,400    17,000,000

Stockholder Equity:
  Misc. Options, Warrants                         0             0             0
  Redeemable Preferred Stock                      0             0             0
  Preferred Stock                                 0             0             0
  Common Stock                                1,100         1,000         1,000
  Retained Earnings                      -2,461,000    -2,218,700    -1,865,000
  Treasury Stock                           -374,900      -508,800      -397,400
  Capital Surplus                           807,800       790,800       765,900
  Other Stockhohlder Equity                -199,700      -333,600      -222,200
  Total Stockholder Equity               -2,027,000    -1,935,700    -1,495,500

Net Tangible Assets                      -6,927,100    -7,001,500    -6,915,100


Scientific Games Corporation (SGMS)         [Indices near +3.0, near zero,
                                            or < zero bear special attention.]
P/E Ratio Tests:
P/E Ratio < 28?            0.0000          P/E Ratio > 5?             0.0000
P/E Ratio Vs Growth Rate:  0.0000          Forward P/E Ratio < 28?    0.7290
Price/Sales Ratio < 2.3?   3.0000          Inventory/Sales < 5%?      0.6342
Sales < $1 Billion?        0.3243          Operating Margin < 7.5%?   0.5030

Balance Sheet Tests:
Debt/Equity < 0.40?        1.0000          Long-Term Debt Service:   -1.1850
LTD Being Reduced?        -3.0000          Short-Term Debt Service:  -0.7320
Current Ratio > 2?         0.0963          Working Capital >= 1.5?    3.0000
Leverage Ratio < 20%?      0.0400          Debt/Assets < 1?           0.8846
Quick Ratio > 1?           3.0000          Inventory Turnover > 1?    0.0922
Share Equity Increase:     2.3415          Market Cap.< 1.5 Billion?  0.6191
                                           Intangibles < 3% Assets?   0.0473
Income Tests:
Profit Margin < 7.5%?     -1.2720          EPS Annual Growth > 10%?   0.1460
Dividend Yield > 2.0%?     0.0000          EPS 3-yr Growth > 15?      0.8632
Enterprise Value/Revenue   0.7883          EPS Growth Consistent?     2.0000
Enterprise Value/EBITDA:   3.0000          Collection < 45 days?      0.5555
EPS Qrtly Growth > 10%?    0.0000          Gross Pft/Cur. LTD > 1?    0.2186
                                           Borrowing Int. Rate < 6%? -0.8594
Stock Performance Tests:
Volatility > 25%?          2.3885          % Held by Insiders < 5%?   0.1255
Beta > 1.25?               1.1920          % Held by Institut. < 50?  0.7406
50 Da MA > 200 Da MA?     -1.2820          % Held by Institut. > 30?  2.2503
52-Wk Change vs. S&P 500: -1.8059          Short Ratio > 5?           0.7240
Price/Book Value < 3?     -2.7888          Short % of Float > 20?     0.6715
Return on Assets > 17%?    0.2424          Average Volume > 100,000?  3.0000

Cash Flow Tests:
Oper. C.F. > Lever'd C.F:  3.0000          Positive Free Cash Flow?   3.0000
Positive Oper. Cash Flow?  3.0000          Price to C.F.Ratio < 14?:  3.0000
                                           Cash Flow / Assets > 10%?  1.9441

SGMS   Scientific Games Corporation        Overall Zenith Index:      0.7398


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Financial Statements

SCIENTIFIC GAMES CORP CLASS A  (SGMS)       INCOME STATEMENT

Fiscal year ends in December.                        2013-12         2014-12         2015-12         2016-12         2017-12             TTM           

Revenue                                        1,090,899,968   1,786,400,000   2,758,799,872   2,883,399,936   3,083,599,872   3,248,399,872
Cost of revenue                                  591,699,968     849,400,000   1,104,099,968   1,106,300,032   1,164,600,064   1,218,300,032
Gross profit                                     499,200,000     937,000,000   1,654,700,032   1,777,100,032   1,919,000,064   2,030,099,968


Operating expenses
Research and development                          26,000,000     117,000,000     183,900,000     204,800,000     184,100,000     196,600,000
Sales, General and administrative                266,400,000     507,700,000     567,699,968     577,000,000     613,100,032     672,000,000
Restructuring, merger and acquisition             22,700,000      30,700,000      21,900,000      57,000,000      45,900,000     121,300,000
Other operating expenses                         179,700,000     423,600,000     881,299,968     681,699,968     636,899,968     582,200,000
Total operating expenses                         494,800,000   1,079,000,064   1,654,800,000   1,520,499,968   1,480,000,000   1,572,099,968

Operating income                                   4,400,000    -142,000,000        -100,000     256,600,000     439,000,000     458,000,000
Interest Expense                                 119,500,000     307,200,000     664,899,968     661,400,000     609,699,968     600,000,000
Other income (expense)                           -28,200,000     -45,700,000  -1,029,200,000     -73,900,000     -57,100,000    -170,400,000
Income before taxes                             -143,300,000    -494,900,000  -1,694,200,064    -478,700,000    -227,800,000    -312,400,000
Provision for income taxes                      -117,700,000    -260,600,000    -299,900,000    -125,000,000      14,500,000      -2,400,000
Net income from continuing operations            -25,600,000    -234,300,000  -1,394,300,032    -353,700,000    -242,300,000    -310,000,000
Net income from discontinuing ops                 -4,600,000               0               0               0               0               0
Net income                                       -30,200,000    -234,300,000  -1,394,300,032    -353,700,000    -242,300,000    -310,000,000
Net income available to common shareholders      -30,200,000    -234,300,000  -1,394,300,032    -353,700,000    -242,300,000    -310,000,000

Earnings per share
Basic                                                  -0.36           -2.77          -16.23           -4.05           -2.72           -3.43 
Diluted                                                -0.36           -2.77          -16.23           -4.05           -2.72           -3.43 

Weighted average shares outstanding
Basic                                             85,000,000      84,600,000      85,900,000      87,300,000      89,100,000      90,100,000
Diluted                                           85,000,000      84,600,000      85,900,000      87,300,000      89,100,000      90,100,000

____________________________________________________________________________________________________________________________________________


SCIENTIFIC GAMES CORP CLASS A  (SGMS)       BALANCE SHEET

Fiscal year ends in December.                        2013-12         2014-12         2015-12         2016-12         2017-12             

Assets

Current assets

Cash

Total cash                                       153,700,000     171,800,000     128,700,000     115,100,000     788,800,000

Receivables                                      346,000,000     468,400,000     487,100,000     495,000,000     540,899,968
Inventories                                      137,800,000     265,600,000     248,500,000     242,300,000     243,100,000
Deferred income taxes                             35,100,000      72,800,000               0               0               0
Prepaid expenses                                 119,300,000     183,500,000     123,300,000     114,100,000     131,100,000
Other current assets                             169,600,000     215,900,000     187,900,000     150,100,000     172,500,000
Total current assets                             961,500,032   1,378,000,000   1,175,500,032   1,116,600,064   1,876,400,000

Non-current assets

Property, plant and equipment
Gross property, plant and equipment            1,305,699,968   1,706,599,936   1,640,800,000   1,501,100,032   1,479,299,968
Accumulated Depreciation                        -533,100,000    -693,800,000    -846,800,000    -888,899,968    -911,100,032
Net property, plant and equipment                772,600,000   1,012,800,000     794,000,000     612,200,000     568,200,000

Equity and other investments                     367,200,000     288,200,000     228,500,000     179,900,000     253,900,000
Goodwill                                       1,186,899,968   4,108,300,032   3,013,700,096   2,888,399,872   2,956,100,096
Intangible assets                                754,600,000   2,844,300,032   2,405,900,032   2,177,400,064   1,944,000,000
Deferred income taxes                             22,600,000               0      20,700,000               0               0
Other long-term assets                           176,500,000     363,600,000      93,900,000     112,900,000     126,700,000
Total non-current assets                       3,280,399,872   8,617,199,616   6,556,700,160   5,970,800,128   5,848,900,096

Total assets                                   4,241,900,032   9,995,200,512   7,732,199,936   7,087,399,936   7,725,300,224 

Liabilities and stockholders' equity

Liabilities

Current liabilities
Short-term debt                                   30,400,000      50,600,000      50,300,000      49,300,000      40,300,000
Accounts payable                                 140,900,000     155,800,000     159,800,000     188,900,000     190,400,000
Taxes payable                                     19,100,000      40,200,000      28,000,000      25,200,000      27,700,000
Accrued liabilities                              152,800,000     244,800,000     261,800,000     235,600,000     235,500,000
Deferred revenues                                 39,100,000      55,900,000      63,800,000      58,800,000      97,700,000
Other current liabilities                         74,800,000     113,000,000      90,200,000     134,600,000     148,200,000
Total current liabilities                        457,100,000     660,300,032     653,900,032     692,400,000     739,800,000

Non-current liabilities
Long-term debt                                 3,162,200,064   8,465,399,808   8,156,700,160   8,024,900,096   8,736,300,032
Deferred taxes liabilities                       138,000,000     628,800,000     228,200,000      70,200,000      73,100,000
Other long-term liabilities                      109,600,000     236,800,000     188,900,000     235,600,000     203,100,000
Total non-current liabilities                  3,409,799,936   9,331,000,320   8,573,799,936   8,330,699,776   9,012,500,480

Total liabilities                              3,866,899,968   9,991,300,096   9,227,700,224   9,023,099,904   9,752,299,520 

Stockholders' equity

Common stock                                       1,000,000       1,000,000       1,000,000       1,000,000       1,100,000
Additional paid-in capital                       737,800,000     743,200,000     765,900,032     790,800,000     807,800,000
Retained earnings                               -236,400,000    -470,700,000  -1,864,999,936  -2,218,700,032  -2,460,999,936
Treasury stock                                  -145,700,000    -175,200,000    -175,200,000    -175,200,000    -175,200,000
Accumulated other comprehensive income            18,300,000     -94,400,000    -222,200,000    -333,600,000    -199,700,000
Total stockholders' equity                       375,000,000       3,900,000  -1,495,500,032  -1,935,699,968  -2,027,000,064
Total liabilities and stockholders' equity     4,241,900,032   9,995,200,512   7,732,199,936   7,087,399,936   7,725,300,224

____________________________________________________________________________________________________________________________________________


SCIENTIFIC GAMES CORP CLASS A  (SGMS)       Statement of CASH FLOW

Fiscal year ends in December. USD.                   2013-12         2014-12         2015-12         2016-12         2017-12             TTM           

Cash Flows From Operating Activities
Net income                                       -30,200,000    -234,300,000  -1,394,300,032    -353,700,000    -242,300,000    -310,000,000
Depreciation & amortization                      203,000,000     454,300,000     903,200,000     738,700,032     682,800,000               0
Investment/asset impairment charges                        0               0   1,002,600,000      69,000,000               0               0
Stock based compensation                          22,300,000      24,100,000      25,400,000      35,300,000      27,200,000               0
Change in working capital                        -71,500,000    -109,000,000    -168,800,000     -96,100,000     -27,300,000    -186,800,000
Accounts receivable                              -15,700,000      97,100,000      26,400,000      30,000,000     -48,000,000               0
Inventory                                         13,600,000      12,400,000      29,300,000       2,500,000      -2,200,000               0
Accounts payable                                  -5,100,000     -33,400,000       4,500,000      14,700,000      64,500,000               0
Accrued liabilities                               52,600,000      47,000,000         100,000               0               0               0
Other working capital                           -116,900,000    -232,100,000    -229,100,000    -143,300,000     -41,600,000    -186,800,000
Other non-cash items                              47,600,000      68,400,000      46,100,000      25,800,000      66,700,000     856,800,000
Net cash provided by operating activities        171,200,000     203,500,000     414,200,000     419,000,000     507,100,000     360,000,000

Cash Flows From Investing Activities
Investments in property, plant, and equipmen    -113,700,000    -149,200,000    -219,200,000    -272,900,000    -293,700,000    -354,000,000
Acquisitions, net                             -1,548,999,936  -3,143,899,904      -2,700,000      -1,200,000    -165,000,000    -462,200,000
Purchases of intangibles                         -52,100,000     -89,100,000    -104,400,000               0               0               0
Other investing activities                        50,100,000      49,300,000      62,500,000      42,400,000      44,100,000      34,900,000
Net cash used for investing activities        -1,664,700,032  -3,332,900,096    -263,800,000    -231,700,000    -414,600,000    -781,299,968

Cash Flows From Financing Activities
Debt issued                                    2,293,700,096   5,697,299,968     170,000,000     360,000,000   2,587,399,936   3,397,400,064
Debt repayment                                  -670,400,000  -2,315,300,096    -311,800,000    -499,700,000  -1,886,400,000  -2,904,600,064
Common stock repurchased                          -2,900,000     -48,200,000        -900,000      -6,100,000      -9,500,000     -27,100,000
Other financing activities                       -81,700,000    -176,400,000     -40,500,000     -50,200,000    -111,300,000    -116,600,000
Net cash provided by (used for) financing      1,538,700,032   3,157,400,064    -183,200,000    -196,000,000     580,200,000     349,100,000

Effect of exchange rate changes                     -500,000      -9,900,000     -10,300,000      -4,900,000       4,500,000      -1,200,000
Net change in cash                                44,700,000      18,100,000     -43,100,000     -13,600,000     677,200,000     -73,400,000
Cash at beginning of period                      109,000,000     153,700,000     171,800,000     128,700,000     156,900,000     240,800,000
Cash at end of period                            153,700,000     171,800,000     128,700,000     115,100,000     834,099,968     167,400,000

Free Cash Flow
Operating cash flow                              171,200,000     203,500,000     414,200,000     419,000,000     507,100,000     360,000,000
Capital expenditure                             -165,800,000    -238,300,000    -323,600,000    -272,900,000    -293,700,000    -354,000,000
Free cash flow                                     5,400,000     -34,800,000      90,600,000     146,100,000     213,400,000       6,000,000
____________________________________________________________________________________________________________________________________________





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Average to Current P/E Ratios
              (SGMS)     Scientific Games Corp.

                               2013    2014    2015    2016    2017

          Annual Earnings:    -0.36   -2.77  -16.23   -4.05   -2.72
Average Price During Year:    12.13   12.10   12.54    9.82   29.38

                P/E Ratio:    33.71    4.37    0.77    2.42   10.80

 Average 5-Year P/E Ratio  =  10.41
             Current Price =  26.48

Previous 5 Quarter Earnings:  -0.44   -0.66   -0.48   -2.24   -0.06

           Current Annualized (Last Four Quarters) Earnings =  -2.78
                                                           ________
                                 Average PE / Current PE =    -1.09
                                                           --------

                                      ...a number above 1.00 is good
                                                1.00 or below is bad


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Financial Ratios

. . . . . . . . . . . . Lowest to Highest, Compared to Industry



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Market Grader

900
901 902 903 904 905 906 907 908 909 910



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Intrinsic Value (DCF)

Intrinsic Value by Discounted Cash Flow Method:

Intrinsic Value



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Fair Value Estimator

Fair Value Estimate:

Fair ValueFair Value



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Projected Earnings

Earnings Estimates
Earnings Estimates



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Research Reports

Click Here for Research Reports



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Analysts' Opinions

Analysts' Opinion 1
Analysts' Opinion 1
Analysts' Opinion 1
Analysts' Opinion 1
Analysts' Opinion 2



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Insider Activity

Insiders Chart Insider Trades
Insider Trades
Executive Compensation Executive Compensation



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Institutional Activity

Institutional Orders to Buy or Sell:

institutions 1
Ownership:

institutions 2


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Sentiment

sentiment

Zenith uses the "sentiment" score above or below 50 to award a positive or negative point in the Decision Matrix.

sentiment sentiment sentiment



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Short Interest Ratio

As the short interest rises as a percentage of average daily share volume (Days to Cover), this is considered a measure of negative sentiment. Similarly, a decrease in that percentage is considered positive sentiment.

short interest short interest


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Standard & Poor's

S&P Stock Report (Requires Adobe Acrobat Reader)



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Management's Discussion of Results of Operations Excerpts

Click Here for Management's Discussion Excerpts



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Channeling Potential

 
The summary below includes a value for `Degree,' which refers on a
scale of 1 to 10 the range of a channel in the period under consi-
deration compared to the total range of price movement. It also looks
for the last closing price to be within the channel, otherwise zeroed.
The `Index' is the `Degree' weighted for volatility.  Generally, the
the higher the index, the more suitable is the stock for trading as
a `rolling stock' between channel high and low points.

Results for SCIENTIFIC GAMES CORP.:
Symbol? SGMS
Total Months Available:  25
       Months in Cycle?   4

Months Covered by Periods:  12

Period 1           Period 2          Period 3
   H1      L1        H2      L2        H3      L3
  54.95   35.80     56.45   39.15     62.80   25.30

RANGE   =  62.80  TO   25.30            Close =  26.70
CHANNEL =  54.95  TO   39.15           Degree =   4
Volatility =  59.18%                    Index =  23
Channel Chart



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MACD Histogram Divergence

The theory is that connecting the two most recent peaks or valleys of the MACD histogram will signal the direction of the next major move.



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Intraday Chart

2 Days:



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Val Idea

2 out of 8 favorable, (negative opinion.)

Val Idea


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Stock Consultant

Stock Consultant Stock Consultant


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Point & Figure Chart

P & F Chart


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Wall Street Analyzer






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Marketspace Chart

Marketspace Chart



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Time Series Forecast

Time Series 1 Time Series 2


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Neural Network Prediction

"Neurostock" can only track long trades. Therefore its performance, as tracked by itself on stocks which are consistently falling, may not appear as good as it could if each "sell" signal were a "short sale."

Neural Chart
Heading
Neural Trades Neural Prediction



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Ultimate Trading Systems

2 out of 3 of the ultimate systems favor an upmove.


System Below:
Short term outlook: Positive: Bright Green, Negative: Bright Red
Long term outlook: Postive: Dark Green, Negative: Dark Red.




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Recommendation

Decision Weighting Factors
FactorsWeighted Points
News + 1
Comparison + 1
Industry + 1
Bond Issue + 1
Zenith Index - 1
Non-GAAP vs. GAAP Earnings + 1
Cash Flow - 1
Average to Current P/E - 1
Ratios - 1
Market Grader - 1
Intrinsic Value DCF - 1
Fair Value Estimator - 1
Projected Earnings + 1
Research Reports - 1
Analysts + 1
Executive Perquisites - 1
Insider Activity + 1
Institutional Activity + 1
Management Reporting + 1
Short Interest - 1
Sentiment - 1
Standard & Poor's - 1
MACD Histogram Divergence + 1
Val Idea - 1
Stock Consultant + 1
Point & Figure - 1
Wall Street Analyzer - 1
Marketspace Chart - 1
Time Series Chart + 1
Neural Network + 1
Stock Options + 1
Ultimate Trading Systems + 1
Total + 0
Place 1.095 shares of Scientific Games Corporation (SGMS) on the Active List.