The Las Vegas Raiders stadium is being built. The new multibillion-dollar Resorts World property is finally coming out of the ground. The Las Vegas economy is doing well construction is booming. One extra turn of Ebitdar gets you to a $36 stock from $24 today. The Ebitdar multiple could quickly fall below seven because the businesses are performing solidly, with Penn as the scale player. After synergies, we’re looking at a free-cash-flow yield in the high teens, and potentially higher. The company will likely exceed its synergy targets on the Pinnacle merger. At its current price, Penn trades for just over seven times consensus Ebitdar -the “R” stands for 2019 rent. When the stock fell in the fourth quarter, we bought this old friend again. Since then, Penn has become the largest regional gaming operator in North America by merging with Pinnacle. We weren’t worried about it, so we bought Penn stock in the low teens, and it doubled quickly. People were scared about MGM National Harbor, in Maryland, negatively impacting Penn’s West Virginia property. We bought it in late 2016 when all of its peers had started to rally, leaving Penn in the dust because the company wasn’t being acquisitive or acquired, and had put most of its real estate into a REIT. We have the ability to handpick stocks with the largest upside and lowest risk.ĭo you consider Penn National attractive at recent levels? For that reason, and also because valuations aren’t wildly attractive, we haven’t jumped into operators that are meaningfully exposed to Macau, such as Now we’ve started to pick through that carnage.Īren’t you concerned about renewals of the Macau casino concessions in coming years? trade relations with China than American casino operators running insanely profitable casinos in Macau.
It is hard to think of a better poster child for the problems of U.S.
#ARDOUR SOLAR INDEX PLUS#
In Macau, you had issues, plus the downshift in China’s economy. , which had traded in the low teens in early 2017, went to $37 last summer, and then down to $18. They crashed in the period from October to December on concerns about highly levered businesses and the slowing of consumer demand. Why?Ĭasino stocks around the globe, from regionals to Las Vegas to Macau and the rest of the world, enjoyed a pretty fantastic 2017 and most of 2018. You turned bullish on casinos in December. We are extremely bullish about the single-stock opportunities. Countless stocks have rallied 20% to 30% on nothing-no new news or data, except the cessation of year-end tax selling and the panic of markets collapsing, and maybe a little bit of opportunistic buying. Shawn Kravetz: We’re off to a very strong start. Kravetz, based in Boston, believes that despite this year’s revival in gambling shares, the group has more room to run.īarron’s: How is the market treating you this year? Late last fall, that described a lot of casino issues, as investors grew nervous about the industry’s leverage. Kravetz, who manages $30 million, likes what he calls OUCH stocks-out-of-fashion, undiscovered, or underfollowed, cheap, and hated.
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