investora2z
11 years ago
Despite the huge correction over the past one month, the stock has done extremely well on a 52 week basis. It is up more than 90%, and seems to be recovering from the post earnings sell off. The stock has been downgraded by Zacks from an “outperform” rating to a “neutral” rating on Friday. The price target is $20.30 which indicates a 17% upside potential from the market price. Analysts at Thomson Reuters/Verus had also downgraded Monarch from buy to hold recently. The full year earnings per share is expected at $1.09. The valuations are better now and offer an entry opportunity for those who believe in the growth story. The company has only two properties which increases the risk due to lack of diversification. However, as mentioned in a Motley article, the properties are generating cash and do not face as much competition as many of the properties of competitors do. The debt is at manageable levels, and the cash position is also good. On September 30, it had $17.5 million cash and $56 million debt which is reasonable if one factors the revenues and net margins. The Monarch Black Hawk property will be developed into a full-scale resort, and that holds a lot of promise for the company. The industry is capital intensive, and funds are required for creation of facilities and inorganic growth, especially in emerging growth segments. Companies like Caesars (CZR) and MGT Capital Investments (MGT) have acquired companies in the fast growing social casino space. The analyst mentions that 'Monarch is a more nimble, healthier business at the moment, and the earnings multiple may be misleading at this point.' Even the absolute valuations are good, as the stock is trading at 17 times trailing earnings and 14 times forward earnings. The price to sales ratio is 1.48 and the price to book is 1.77.
investora2z
11 years ago
The earnings in the last quarter gave a boost to the stock. It has appreciated by nearly 70% after that. On a 52 week basis the stock is up by ~85%. In the last quarter it had reported an EPS of $0.26 which was a 160% growth on a yoy basis. Even the revenues increased by 34% on a yoy basis to $47.64 million. This was much above the analyst estimates of $0.16 for EPS and $46.80 million for revenues. Currently Wells Fargo & Co. has put a market perform rating on the stock. Zacks downgraded it to neutral but has a price target of $18.00. The stock has a consensus buy rating with a price target of $16.88. Even over the years, the fundamentals have improved. Compared with 2011, the revenues increased by 21% to $161 million and the net income also increased by 57% to $8.91 million. The recent rise can be partly attributed to the impact of the acquisition of Riviera Black Hawk Casino in Colorado. The acquisition has tremendous potential for expansion, and can also be converted into a full fledged resort. The valuations are attractive with forward P/E of around 16 and low price to book of 1.84. Debt is a little high at around $71 million and the cash is around $20 million as on March 31. Debt has increased recently mainly due to the acquisition of the Colorado property. Relative to the larger casino companies, MCRI is still better on debt-equity ratio, and has better growth prospects. It has been making profits unlike many bigger companies which are incurring losses. Specifically, Caesars (CZR), Penn National Gaming (PENN), MGM Resorts (MGM) and Scientific Games (SGMS) have the risk of the $4.5 billion patent infringement lawsuit filed by MGT Capital Investments (MGT). A recent article on Seekingalpha is extremely positive on MCRI.
Penny Roger$
13 years ago
Monarch Casino & Resort, Inc. (Monarch) through its wholly owned subsidiary, Golden Road Motor Inn, Inc. (Golden Road), owns and operates the Atlantis Casino Resort Spa(the Atlantis), a hotel/casino facility in Reno, Nevada. Monarch’s other wholly owned subsidiaries, High Desert Sunshine, Inc. (High Desert) and Golden North, Inc. (Golden North), each own separate parcels of land located adjacent to the Atlantis. Through Golden Road, Monarch owns and operates the Atlantis Casino Resort Spa, which is located three miles south of downtown in the area of Reno, Nevada. The Atlantis features 61,000 square feet of casino space; a hotel and a motor lodge with a combined 824 guest rooms; 10 food outlets; an enclosed year-round pool with waterfall; an outdoor pool; two retail outlets offering clothing and resort gift shop merchandise; a full service salon for men and women; an 8,000 square-foot family entertainment center, and 52,000 square feet of banquet, convention and meeting room space.
http://www.google.com/finance?q=MCRI
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