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  #1  
Old October 7th, 2011, 01:30 AM
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Roswell Crash Survivor Roswell Crash Survivor is offline
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Default Is *this* normal for a casino stock balance sheets?

I'm looking at one particular casino/gaming stock listed overseas, and to me it looks a tad too good to be true from a balance sheet POV.

Accounting is not my forte, but auditing was done by a Big 4 audit firm. (Unless this turns out like Enron...)

Its current market capitalization is equivalent to 2 X 10^9 (two billion) US dollars, multiple operations in separate jurisdictional areas.

Assuming the numbers from their annual report are accurate:

Earnings per share is approximately 9% of the traded share price.

The 'book value' of company assets*, divided per issued share is more than double the price the share is currently traded at.

Value of 'Cash and cash equivalents' on hand is worth almost half the market capitalization, excluding working capital.^


*excluding intangibles, derivative financial instruments and other 'assets' that are difficult to value and prone to accounting 'funny business'
^I understand casinos are inherently cash intensive operations but this is just absurd

I've also done a fair amount of research on off-book fundamentals like business risks, market sector, competition and quality of management.

Do you think these ratios are normal for a casino/gaming stock? Does it look like 'good value' to you?

-RCS

Last edited by Roswell Crash Survivor; October 7th, 2011 at 02:04 AM.
  #2  
Old October 7th, 2011, 01:40 AM
shadroch shadroch is offline
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I think the most important number for a casino stock would be the EBITDA number.
  #3  
Old October 7th, 2011, 03:12 AM
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Default murky

Chinese stocks in the US are now under investigation.
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Old October 7th, 2011, 02:04 PM
moo321 moo321 is offline
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Roswell, you are asking very good questions. Could you post a ticker so we can analyze things a bit more in depth?

I can generalize and say that a lot of casinos have massive debt loads. Almost all of their operating costs are capital related: billion dollar casino with millions in debt payment, a few hundred thousand for employees.

Price to book value is a good metric for casinos, but you also have to look at how they are managing their debt load. Current ratio is a good thing to look at.

I also generally like to look at price-sales ratio when evaluating stocks, as my research indicates that this metric has one of the strongest correlations with long term stock performance.

Also, I am currently in MGM because I consider it a strong value stock with massive growth potential. The other Macau gaming companies are good, but either overvalued, or in the case of LVS, mismanaged. LVS has some of the worst management I've ever seen in a large company.
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Old October 7th, 2011, 02:11 PM
moo321 moo321 is offline
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Also, where is this traded? Sometimes if it's in a backwater stock market, it can have a very thin volume of shares, or it can cost a lot to find a broker to let you buy it.
  #6  
Old October 8th, 2011, 03:07 AM
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I've decided to investigate this opportunity much more closely before making a fool of myself on here. Its a matter of investment discipline for me.

In the responses I've seen here, I've seen a few assumptions made; not all of these assumptions were necessarily correct.

Moo, if you'd like I can PM you the identity of stock and the bourse its listed on.
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Old October 8th, 2011, 06:53 PM
moo321 moo321 is offline
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Yeah, go ahead and PM me. Also, you can ask craazyman about stocks, he's very sharp.
  #8  
Old October 9th, 2011, 04:01 AM
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Roswell Crash Survivor Roswell Crash Survivor is offline
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Quote:
Originally Posted by moo321 View Post
Yeah, go ahead and PM me. Also, you can ask craazyman about stocks, he's very sharp.
PM sent to you. Thanks for the heads up about craazyman.
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Old October 10th, 2011, 06:41 AM
Machinist Machinist is offline
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Quote:
Originally Posted by moo321 View Post
Yeah, go ahead and PM me. Also, you can ask craazyman about stocks, he's very sharp.
And craazy!!!!!!

Mac
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Old October 12th, 2011, 06:25 PM
moo321 moo321 is offline
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To be honest, I can't find much publicly available information on this stock.
 

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