Cryptologic Inc.  (CRYP) Trade Now »     Rate CRYP  -  Discuss CRYP  -  Add to Watch List        

Filed under: Newsletters, Bargain stocks, Stocks to Buy

This week, I've been working on a list of penny stocks to buy. Given that any recovery is likely to be led by the small-cap space, I'm looking closely at the smallest of the small to drive my portfolio higher.

Not for the faint of heart, these so-called penny stocks can generate some really fat returns. I'm not talking about just doubling your money here. Stories abound of returns of 300% or much more on stocks that started out trading for less than $5 per share.

Company Description: CryptoLogic Inc. (CryptoLogic) is a software and services provider to the Internet gaming market

Company currrently trades at 6.2x trailing EBITDA.  Reason being is investor's fear of affects of recent US legislation on banning internet gambling.  Company only generates 20%of revenue from U.S sources and non - U.S sources are growing at a 25% clip.   Assuming U.S. makes up 50% of EBITDA, LTM EBITDA would be more like $17M, resulting in a 12.4x multiple.  This is a fairly draconian assumption though.