Penn National gaming recently acquired Pinnacle Casinos [Ameristar, Boomtown, etc] to form the largest regional casino firm in the US.They estimate $100m of cost savings the first two years, and have re-affirmed that very confidently. Stock is trading at almost 11% FCF yield on 2019 numbers, 13% for 2020 numbers. Also the cheapest on an EV/EBITDA basis at 7.5x 2019 eps.Margins are forecast to expand 1.5-3.5% over the next couple of years. At least two new casinos should be opening up in PA as the State has relaxed casino restrictions and PENN won the bids, one for the minimum bid + $3. This is a low-growth/High FCF business but now operating in a superior economic environment [don't buy it if you think that will change!], rational pricing and promotion due to the merger/buyout of at least 6-8 of the smaller players, the larger property base should drive more visitation, more NV gamblers helps the tax rate, net debt is ~40% of equity, and SCOTUS overturning sports betting ban can only help at the margins.Not a stock you'd look to make 60-100%, more like 20-40% in a couple of years. A clean base hit, not a HR to deep center.
CEO bought 100k shares when it dropped to $31 recently. Back up to $34 already.
Stock was routed in the selloff and year-end tax loss selling. Has begun to rebound nicely. Trading at 5x ebitdar after master lease payments.Very, very cheap. As is MGM.Only buy if you think the economy is and will be fine.
Scratch that ebitda calc, I typed in the wrong data. Getting 6.5x ebitda for 2019e and 15% normalized FCF yield now.
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