Wild Bill's latest article about a pair of stock market tips is now available on the home page at www.theprescription.com
Station's had a big move this year, based mainly on their success in the California Indian market. I agree that it is already priced expensively.
As a rule, most gaming stocks are losers compared to the rest of the market.
One exception is IGT, which consistently gains market share, and consistently rewards investors with dividend increases and capital gains. If you are to buy a gaming stock, this is as solid as one can be.
Park Place is a turnaround stock , that whil loaded with debt, represents a tremendous value play, since they have fou major casinos in the heart of the strip. For the risk taker this might be worthwhile.
Other than that, I see no gaming stocks worth plowing your dough into.
As a rule, most gaming stocks are losers compared to the rest of the market.
One exception is IGT, which consistently gains market share, and consistently rewards investors with dividend increases and capital gains. If you are to buy a gaming stock, this is as solid as one can be.
Park Place is a turnaround stock , that whil loaded with debt, represents a tremendous value play, since they have fou major casinos in the heart of the strip. For the risk taker this might be worthwhile.
Other than that, I see no gaming stocks worth plowing your dough into.
Station will hit $40 at some point in the next 12-18 months. It has had a good run, but look at it fundamentally compared to the "big boys" like PPE. With the recent weakness its forward P/E is lower, around 17x. This for a company that has minimal capital expenses compared to PPE and their half billion dollar project at Caesars. Put it this way, PPE will pay as much for a hotel tower and amenities with no extra casino space the same amount it costs Station to put up about three fully operational cash generating casinos. PPE will make some incremental dollars off the casino and will make money off the rooms, but casino returns are always better than hotel rooms.
I think in the rush to look at the CA casino people have overlooked the fabulous LV locals market. Station still dominates this and there won't be all that much more supply going in. If the population of Vegas continues growing and the people of the city continue to show a huge propensity to gamble, this franchise is seriously undervalued. Unless you think locals are going to start doing their gambling on the Strip, you can't overlook this. Add in a few potential tribal operations which require little investment and are pure cash returns once running and you have a dynamite business. Low capital investment, great repeat customer business. And it trades at about 17x forward P/E. You don't like that for an investment?
I wouldn't get too heavy into IGT. It has had an equally compelling run to where it is now, but the tough part is about to start. When you already have more than half the market in a high margin business, you almost have to run perfectly not to run into growth troubles. IGT won't go down the drain, but at these valuations the company almost has to do mind boggling things to justify further strong gains in share prices.
I think in the rush to look at the CA casino people have overlooked the fabulous LV locals market. Station still dominates this and there won't be all that much more supply going in. If the population of Vegas continues growing and the people of the city continue to show a huge propensity to gamble, this franchise is seriously undervalued. Unless you think locals are going to start doing their gambling on the Strip, you can't overlook this. Add in a few potential tribal operations which require little investment and are pure cash returns once running and you have a dynamite business. Low capital investment, great repeat customer business. And it trades at about 17x forward P/E. You don't like that for an investment?
I wouldn't get too heavy into IGT. It has had an equally compelling run to where it is now, but the tough part is about to start. When you already have more than half the market in a high margin business, you almost have to run perfectly not to run into growth troubles. IGT won't go down the drain, but at these valuations the company almost has to do mind boggling things to justify further strong gains in share prices.
It might, but I couldn't condone PPE as an investment. They have been laggards in profitability and margins for so long that their late to the party efforts just haven't won me over. They certainly have a lot of upside, but I think they are on the verge of giving away their non-core assets while not exactly replacing them with smart investments. The prototypical money-burning company in an industry where almost everyone wins!
IGT is and will continue to be a decent gaming stock to own. Growth will come from further penetration in coinless and slot expansion in states like Pennsylvania.
AZR is pretty cheap these days too given the garage collapse, and the fact that Borgata's upscale motif will never take Trop customers. I suppose PA actually getting slots may hurt, but the added room capacity will earn huge revenue this summer. I paid the highest price I have ever paid for a room this past fourth of July and the 60% of room capacity comped in AC appears on the decline, which can only help a huge place like the Trop.
I'm a fan of HET too.
AZR is pretty cheap these days too given the garage collapse, and the fact that Borgata's upscale motif will never take Trop customers. I suppose PA actually getting slots may hurt, but the added room capacity will earn huge revenue this summer. I paid the highest price I have ever paid for a room this past fourth of July and the 60% of room capacity comped in AC appears on the decline, which can only help a huge place like the Trop.
I'm a fan of HET too.
