Brightstar Lottery Continues $500 Million Buyback with June Treasury Share Purchases

Brightstar shares are down from $18 a share to $11. The reason for the drop was cashflow concerns due to the massive Italian lotto license fee of over €1bn. Since then the company have had the most favourable start to a quarter in their history and have announced two separate shares buyback completions.

To me this signals a company not struggling for cashflow like the market expects.

I've been tracking the rollover jackpots which are most beneficial to their bottom line. Q2 will be announced at the end of this month and I'm predicting a beat to Q1. Q3 is shaping up to be very good for the company, as all of the jackpots have continued to rollover. The company admitted themselves that Q1 was poor due to low jackpot environment. Since then the jackpots have gone on a great rollover streak.

Why are rollovers good? They increase casual participation, who then accelerate the jackpot size which in turn increases more casual participation until the jackpot is eventually won. The longer this goes on the higher the revenue for the company, as they take a % from each ticket sale as they provide the technology for the lottery. Also they benefit from the reinvestment of small wins into more tickets/scratch cards. This is something you can watch and calculate each draw (the increase in jackpot size correlates to increase in sales).

I'm watching this one closely. If no jackpots are won in the next 2/3 weeks then I'll be doubling my already massive investment in this.