Ainsworth Game Technology Limited (ASX: AGI) is quickly building a reputation as one of the leading providers of electronic gaming machines around the world, a reputation which is translating into strong profit growth for shareholders.
However the recent fall in the company's share price seem to ignore this and could make for an opportunity to buy.
Falling share price
Shares in Ainsworth have dropped 10% in the last month and are down 15% so far in 2014, while the S&P / ASX 200 Index (Index: ^AXJO) (ASX: XJO) is down just 0.33%.
Most of the selling in the last month has come after it was noted that associated founder and majority owner Len Ainsworth sold around 1.4 million shares and several other employees, including CEO Danny Gladstone, had sold another 3.6 million shares.
A release to the ASX says that Mr Ainsworth's sales were to provide more liquidity to the shares (he owned 55% of outstanding shares in 2013), while the other sales relate to exercising options tied to Ainsworth's long-term incentive plan. Danny Gladstone was quoted saying:
"The exercise and sale of my options is not reflective of my confidence in the company's growth and future prospects. I remain pleased with the progress to date and we continue to expect that recently released product offerings in North America will provide growth opportunities in the second half of the 2014 financial year".
Growth in hand
That growth was highlighted in the company's first-half FY14 results with earnings before tax jumping 51% to $45.6 million. One of the standouts was the 380% increase in revenues from South America which accounted for 70% of all international revenue.
Ainsworth has grown revenue and profit consistently over the last 10 years and with casino operators like SkyCity Entertainment Group (ASX: SKC) and Crown Resorts Ltd (ASX: CWN) planning big investment in upgrades and new developments going forward, the outlook appears positive.
Foolish takeaway
The falling share price has put Ainsworth back on my radar. The company appears to have a positive growth outlook and a history of delivering for shareholders. If the price drops further it could make for a winning long-term combination.
