Brightstar Lottery PLC 🇺🇸
NYSE: BRSL • EV: $5.3B • Last Close: $14.22
Earlier last year Brightstar sold their gaming and digital divisions to Apollo creating a pure-play global lottery business operating 7 of the world’s 10 largest. Lotteries are recession proof, recurring, and highly profitable with EBITDA margins approaching 50%.
A higher than expected license fee to renew the Italian national lottery has investors worried with shares now trading for an EV/EBITDA of 4.5x, well below peers. Capital requirements are very low with free cash flow being returned to shareholders through a 6.2% dividend yield and a sizable buyback program.
“As we released our mid-term targets, we expect to generate over $7 billion in gross cash in the 2025-2028 period, mostly allocated to funding organic growth, with $1.7 billion expected to be returned to shareholders over the same timeframe.”
- Max Chiara, CFO, Q3 Earnings Release
Income Opportunity Realty Investors 🇺🇸
NYSEAMERICAN: IOR • EV: $73M • Last Close: $18.00
Income Opportunity Realty owns a single mortgage receivable from their external manager and majority owner, Pillar Asset Management. The arrangement is a cash grab for Pillar with the loan paying SOFR + 0%. Management has been slowly tendering for shares with apparent intent of getting above the 90% ownership threshold in order to enact a squeeze out.
Book value sits at $30.73 a share and a squeeze-out would have to be close to this value to avoid regulatory scrutiny.
A Writeup from Clark Street Capital Explaining the Situation (Link).
Disclosure: This newsletter does not provide investment advice. Information presented is for informational purposes only and should not be considered a recommendation to buy or sell securities. The author may or may not own the securities discussed.