Neteller

[Groty]

Revenues increased 108% year over year;
Gross margin increased from 69% to 74%;
Net income increased 177% year over year;
Net income margin of 53% is the highest I think I've ever seen;
Daily receipts up 90% year over year;
Number of cusomers increased 86% (to 2.3 million)
No bank debt;
Pushing into China, Japan, Macau, etc.;
Pursuing other opportunities to diversify away from reliance on gaming;
Doing smallish strategic acquistions to gain access to new markets;

They report earnings in dollars but the stock trades in pence. The stock closed at 789 pence and the exchange rate is about 1.75, so that's a dollar equivalent share price of of $13.80. They earned $0.75, so it trades at 18.4x.

If online poker becomes completely legal in the U.S. the stock will probably at least double overnight and if legislation passes outlawing online poker the stock probably gets cut in half (at least initially). Is it worth the risk to own a very low capital intensive stock at 18x that is exhibiting triple digit growth rates and 50%+ net margins?

[maurile]

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If online poker becomes completely legal in the U.S. the stock will probably at least double overnight . . .

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Unless that induces PayPal to get back into the game.

[TStoneMBD]

if online poker becomes fully legal that means bellagio/wynn/commerce type names will take away from current online poker site earnings. these new poker rooms would probably use deposit methods other than neteller, so in theory neteller would go down, not up if online poker becomes legal. it is only as high as it is right now because its so hard to deposit with credit cards. also, the future legality of internet poker has likely already been factored into the value of the neteller stock. you should find out whether this has been factored in properly or not based on your assessment of the situation in order to determine if the stock is undervalued.

btw this isnt the right forum for this, http://forumserver.twoplustwo.com/po...p;Board=stocks