The Zacks Analyst Blog Highlights: Penn National Gaming, Monarch Casino & Resort, Full House Resorts and Caesars Entertainment
CHICAGO, Oct. 28, 2014 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Penn National Gaming Inc. (Nasdaq:PENN-Free Report), Monarch Casino & Resort Inc. (Nasdaq:MCRI-Free Report), Full House Resorts Inc. (Nasdaq:FLL-Free Report) and Caesars Entertainment Corp. (Nasdaq:CZR-Free Report).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Monday's Analyst Blog:
Gambling Stock Roundup
Last week was quite positive for the companies in the gambling industry with Penn National Gaming Inc. (Nasdaq:PENN-Free Report) and Monarch Casino & Resort Inc. (Nasdaq:MCRI-Free Report) posting better-than-expected third quarter results and hence witnessing share price gains.
In one other development, Full House Resorts Inc. (Nasdaq:FLL-Free Report) stated that it is planning to proceed with the sale of the company deeming it to be the best possible course of action to maximize stockholder value in the current scenario. Meanwhile, Caesars Entertainment Corp. (Nasdaq:CZR-Free Report) is reportedly seeking a license from the Philippine government to build a resort in the country. We need to wait and see how the expansion efforts of this debt-ridden company work.
However, expectations of a decline in gross gaming revenues in Macau for the month of October remain overhangs. (Read last to last week's development: Gambling Stock Round Up for Oct 20, 2014)
Recap of the Week's Important Stories:
1. Monarch Casino & Resort posted better-than-expected third quarter results with earnings and revenues beating the Zacks Consensus Estimate. Share price of the company surged approximately 11% in response. Earnings of 24 cents beat the Zacks Consensus Estimate of 21 cents per share by 14.3% possibly due to a decline in interest expenses. However, it declined 25% year over year. The downside reflects lower revenues and higher operating expenses.
Net revenue of $48.6 million also beat the consensus mark of $48.0 million by 1.2%. However, it declined 0.8% year over year owing to lower casino revenues at both Monarch Black Hawk and Atlantis.
Monarch Black Hawk casino revenues continue to be impacted by disruption from the ongoing renovation of the property that has resulted in 13% reduction in the number of slot machines for some time on the gaming floor in order to accommodate the work. Adjusted EBITDA was $12.0 million, down 6.2% year over year owing to higher casino operating expense.
2. Penn National Gaming posted strong third quarter results with earnings and revenues beating the Zacks Consensus Estimate. Also, the company increased its earnings and revenue guidance for 2014. Earnings of 10 cents per share beat the Zacks Consensus Estimate, the year-ago figure as well as management's expectation of 6 cents by 66.7%. The upside reflects decline in interest expense and increase in interest income.
Net revenue of $646.0 million surpassed the consensus mark of $634.0 million by 1.9% and also exceeded management's expectation of $633.5 million. Revenues and earnings surpassed management's expectation owing to better-than- projected property operating results including outperformance at some of the larger properties, solid initial partial quarter contributions from Hollywood Gaming at Dayton Raceway and Hollywood Gaming at Mahoning Valley Race Course. However, revenues declined 9.6% year over year due to a decline in revenues at East/Midwest and Southern Plains segments.
Meanwhile, the company expects loss per share and revenues of 7 cents and $621.1 million, respectively, in the fourth quarter of 2014. After lowering its guidance in the second quarter of 2014, the company increased its earnings guidance for 2014. It expects earnings of 13 cents compared to its previous expectation of 2 cents. Also, the company increased its revenue expectation to $2.56 billion compared to the previous expectation of $2.55 billion.
3. Caesars Entertainment is reportedly seeking a license and approval for leasing land from the Philippine government to build a $1 billion resort in the country. The resort that will be located next to Ninoy Aquino International Airport will have shops, restaurants and an entertainment area that would have international performers. The company believes that the project would boost the prospects of the casino resort that it is building in South Korea. In fact, the company plans to build a network of casinos in Asia and is also interested in the Vietnamese market.
The company expects the Philippine resort to benefit from the increasing number of travelers from South Korea and China, especially at a time when reportedly there is no major international brand currently in Manila.
4. Full House Resorts announced that its board of directors has authorized management to initiate a process for the sale of the company. After evaluating the strategic alternatives, the board decided that the sale of the company is the best course of action to maximize stockholder value. The company will continue to work with leading investment banks as it pursues the sale process.
A few days back, three shareholders of Full House Resorts who own 6.2% of the outstanding shares of the company sent a letter to the other shareholders. Per the letter, they intended to call a Special Meeting in order to expand the board of directors to 10 of which 5 would be highly qualified individuals.
These shareholders showed their concern that the company has of late not performed diligently. They stated that over the past one year, the company has lost almost 60% of its share price. They were now pleased that their efforts have resulted in finally initiating a process by the board that might enhance stockholder value.
The company also stated that the sale process would not impact its day to day operations. The company remains committed to explore further growth opportunities in New York. It remains financially strong and committed to managing its properties.
In one other development, the board announced that it has amended bylaws in order to reduce existing shareholder rights to call a special meeting. Per the amended law, the board has the right to forbid the call of a special meeting by the shareholders even if it is in accordance with the bylaws. Moreover, it authorizes the board to delay any vote on the subject matter presented by stockholders by calling its own meeting some time later.
One of the stockholders declared it to be an offensive action taken by the board of directors of Full House Resorts. The shareholder stated that this bylaw is void and unenforceable under Delaware law and would be considered as a breach of directors' fiduciary duties to stockholders.
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today.
About Zacks
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros.
Get the full Report on PENN - FREE
Get the full Report on MCRI - FREE
Get the full Report on FLL - FREE
Get the full Report on CZR - FREE
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Logo - http://photos.prnewswire.com/prnh/20101027/ZIRLOGO
SOURCE Zacks Investment Research, Inc.
Share this article