Did you hear about the gambler....

...who was referred to gamblers anonymous but wasn't too sure about it? That was until he heard that the meeting was at 25 to 1 so he thought he would give it a go!

Talking about gambling I was looking at the results from a stock called Netplay TV plc (NPT) yesterday. Now as you would probably expect, being a gambling related stock, it appears to be cheap trading on a P/E of around 6.4x this years forecast earnings which they suggested they were comfortable with in yesterdays statement. In addition to this it is forecast to yield around 5.5% this year with the forecast 20%+ increase in the dividend which is nearly 3x covered by earnings.

The balance sheet seems OK with £14.3 million in cash versus a market cap. of about £32 million, although net of player balances this is £12.6 million. In the statement they say they will be reviewing the use of the cash balances at the year end, so scope for a special dividend or share buy backs perhaps?

The shares have been dreadful performers (see chart below) having more than halved this year on the back of regulatory and tax changes, which they discuss in the statement, which is worth reading if you are interested in this one. It is a smaller company than I normally like to invest in, although having made some money on GVC I'm tempted to take a punt on it at these levels. This is as the value, yield and balance sheet seem OK, the shares are oversold and there has been some non-executive director buying this morning by Andrew Lapping taking his personal stake and via companies he is a director of to just under 1%. Obviously don't buy it if you are a widow or an orphan.