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September 28, 2007

SilverStar Holdings Makes a Big Move

posted by MR WAVETHEORY at 9/28/2007 07:48:00 AM
I read the earnings press release of SilverStar Holdings (Nasdaq SSTR) and they make video games. They make lots of money too! EBITDA was $4.6 million in the quarter. Net income was $2.6 million. The stock is up +62% at $3.99.

Revenues, operating EBITDA and net income improved dramatically as we expeditiously leveraged the company's new large back catalog and began the transition to next gen game platforms, like Xbox 360, Nintendo, DS and Wii; and introduced new titles.

Empire Interactive
and Strategy First are the names of SilverStar's gaming brand. Games include Starsky and Hutch and Starship Troopers.

The guidance is fairly strong too. Based on the current release schedule, most of the company's new high profile titles for fiscal 2008 will be released during the October through June period. Management anticipates revenues will exceed $40 million for the full fiscal year 2008, with operating EBITDA in the range of 17.5% to 25.0% or $7 million to $10 million.

The market cap of the company is $40 million which means it is trading at 4-6x EBITDA which is fairly cheap.

Update: SilverStar is now the #6 stock on Nasdaq by volume traded today with 16 million shares. I looked at the historic chart and it traded as high as $15 back in 2000. Hard to believe! Maybe it closes at $8?

Update: There is clearly some speculation here. You have to love this post on the Y! Finance message board "Should I buy 10,000 shares now?" The poster asks, "Please help me. I just inherited some money and am new to the stock market." What do you think?

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