EGP is one of the few stocks in the top 150 stocks on the ASX which is around 5% of its year low. Obviously there has been a good run up in the All Ordinaries in recent months and EGP has been slow to participate.
It has made positive progress renewing its board and management, but has three key issues:
1. the poor share price performance mentioned above 2. the poor recent profit results. Promises of better performance from Star are still to be cemented. 3. the competitive landscape is worsening meanwhile. James Packer has just been told he can simply have a Sydney 'gaming licence' which doesn't say much for Echo's exclusive 'casino licence'. A large international casino operator was also reported in the media as showing interest in setting up a casino in Sydney. Other competitors are finding ways around any need to takeover Echo such as the latest media reports reveal. The NSW Premier is prepared to introduce a new law to provide Crown with a new 'gaming licence'in Sydney. Crown and Genting have been waiting for so long to be given approval to increase their Echo holdings to 25% that they have may have lost interest and found other ways of getting what they want. It is interesting to note James Packer tried to get a seat on Echo's board and a JV may have been likely. A takeover battle does not seem to have a clear chance of getting off the ground if there are now so many possible corporate combinations.
EGP Price at posting:
$3.62 Sentiment: Sell Disclosure: Not Held
