3.82

This company is a good company 12-24 months from now. Wall Street hates it because this is clearly a transition year for the company, as the gambling legislation in the US took out 30% of its revenue. This company has a strong presence in Europe, expanding in Asia. Has no debt and about $100 million in cash. Management is good and cutting costs and is not waisting the cash. It is strategically making acquisitions looking through every possible company. This company will be a huge winner if you stick with it.

tied to the legalization of internet gambling

it's a gamble

value, cash margin

Cryptologic would benefit considerably if US players could play on poker sites. CRYP makes the software that fuels many of the online poker sites out there. CRYP has an excellent balance sheet to handle any slowdown with $126mm cash in the bank and no debt. With a market cap of $410mm, that leaves it with an enterprise value of just $283mm. The company had cash flows of $40mm over the past 12 months, giving it a multiple of enterprise value over cash flows of just 7, making it an excellent takeover target at these levels if one thinks the legislation will be repealed. Even without a repeal, analysts from ThinkEquity expect the company to earn $1.30 per share on revenues of $90mm in 2007, down from their earlier estimate of $125mm revenues and $2.08 a share. A harsh blow but not a knockout punch as many had initially expected.

TA

Took a hit on US online gambling ban, but 70% of revenues were in Europe, has growth potential in Asia.

Unloved due to the US laws against online gaming. Well-positioned though to come back strong in the international market.

Like the Growth Speculation. Tremendous Balance Sheet. Doing well despite US Legislation. Watch Out for CRYP in '07