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Intertain – “May go private”

images-17With a share price that is nowhere near what he considers fair value, Global Maxfin Capital analyst Manish Grigo thinks Intertain Group (TSX:IT) may be headed towards becoming a private company.

Last week, Intertain Group reported its Q1, 2016 results. The company earned $9.96-million on revenue of $128.5-million, a 292 per cent increase over the $32.7-million topline the company reported in the same period last year. “Intertain continues to outperform our expectations,” said CEO John Kennedy FitzGerald. “We remain focused on the execution of our plans in order to continue to deliver great results and value to our shareholders.”

Grigo says Intertain beat his estimates on both the top and bottom line due to strong organic growth. The analyst says investors looking for near-term catalysts might find a doozy. “The company indicated that it is still reviewing several expressions of interest in acquiring all of IT’s gaming assets,” notes the analyst. “Additionally, IT may look to list in Europe. We would speculate that IT’s management may potentially choose to take the Company private given the recent decline in share price and healthy growth in FCF. LONG TERM: Growth in existing and new geographies, as well as expansion into new iGaming streams, driven by strategic acquisition, in addition to increased global mobile penetration driving organic growth.”

In a research update to clients today. Grigo maintained his “Buy” rating and one-year price target of $26.00 on Intertain Group, implying a return of 145.1 per cent at the time of publication.

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