Pacific Online Systems Corporation or LOTO in the Philippine Stock Exchange is engaged in the business of developing and managing online systems for the Philippine gaming industry. It also leases to the Philippine Charity Sweepstakes Office (PCSO) an on-line lottery equipment and accessories for the PCSO’s lottery operations in Visayas and Mindanao. For the first 3 quarters of 2010, the company already racked up PHP220 million in net income, up by 8% from the same period of 2009. With the 6/55 jackpot reaching a record high of P741 million in November, 4th quarter revenues from equipment leasing would most likely swamp the previous year’s figures. With the introduction of a more varied and exciting new games, sustained marketing effort, plus the government’s push to eradicate illegal gambling as well, growth in the company’s income would most probably supported.
Technically, a nice cup and handle pattern appears to be forming in the daily chart of LOTO. What is exciting about it now is that LOTO could be in the verge of a break out soon. Would the likely increase in the company’s fourth quarter bottomline push the stock higher? Probably. In any case, if LOTO breaks out of the said pattern, an upside of P27.00 (measured by projecting the height of the cup from the point of potential breakout) could be achieved. It’s not exactly the return you would have if you win the lottery but a potential capital gain of around 60% is already a handsome one, right?