Barron’s: REIT Rumor Sends Small-Cap Casino Stocks on a Roll

Photo courtesy of Midwestcasinotours.com

Photo courtesy of Midwestcasinotours.com

A recent announcement that Penn National Gaming, a mid-cap casino and racetrack operator, was going to restructure itself into a REIT (real estate investment trust) sent many other casino industry stocks much higher, according to a story in Barron’s Dec. 10 issue (subscription required). The idea, according to the Barron’s story by Vito J. Racanelli, is that Penn would pay substantially less in taxes as a REIT.

Whether or not it was a wise move or was indeed going to happen, the REIT concept sent investors looking for other casino stocks that might consider the same thing. Barron’s listed two small caps–Boyd Gaming and Ameristar Casinos–as two stocks that benefited and outperformed the market after the PENN announcement.

Las Vegas-based Boyd Gaming Corp. (NYSE: BYD, http://www.boydgaming.com) has gaming operations in Nevada, Illinois, Louisiana, Mississippi, Indiana and New Jersey. It also owns and operates a travel agency and insurance company in Hawaii that underwrites travel-related insurance. It owns a pari-mutuel jai-ali facility in Florida and 87 acres of land on the Las Vegas strip. In 2011 BYD purchased the IP Casino Resort Spa in Biloxi, MS. BYD’s 52-week trading range is $4.75-$9.75 and market value is about $582 million. It closed Dec. 18 at $6.72, up 66 cents for the day.

Las Vegas, based Ameristar Casinos Inc. (Nasdaq: ASCA, http://www.ameristar.com) is a developer, owner and operator of casinos and has eight properties in seven markets. Its casinos are located in St. Louis, Council Bluffs, IA; Kansas City, Denver, Vicksburg, MI; Chicago and Jackpot, NV. Earlier this year it purchased a 40-acre site in Springfield, MA and all the assets of Creative Casinos of Louisiana. ASCA has a 52-week trading range of $15.04-$23.47 and a market value of $725 million. It closed Dec. 18 at $22.10, up 54 cents for the day.

St. Louis-based Isle of Capri Casinos (Nasdaq: ISLE, http://www.islecorp.com) owns and operates 15 gaming facilities in Louisiana, Mississippi, Missouri, Iowa, Colorado and Florida. The properties feature 40 restaurants and a harness racing track as its casino in Florida. Last Nov. 29 it sold its Biloxi, Mississippi to Golden Nugget Biloxi Inc. ISLE’s 52-week trading range is $4,21-$7.92 and its market cap is $226 million. It closed Dec. 18 at $5.73, up 19 cents for the day.

Las Vegas-based Full House Resorts Inc. (NYSEAMEX: FLL, http://www.fullhouseresorts.com) owns, manages or invests in a group of casino resorts including the Fire Creek Casino near Battle Creek, MI, the Buffalo Thunder Casino and Resort in Santa Fe, NM. FLL owns Stockman’s Casino in Fallon, NV; and Rising Star Casino and Resort in Rising Sun, IN. In 2011 FLL purchased the Grand Victoria Casino and Resort in Rising Sun, IN. In 2012 FLL purchased the Silver Slipper Casino. FLL’s 52-week trading range is $2.33-$4 and its market value is $58 million. FLL closed Dec. 18 at $3.11, down 1 cent for the day.

Reno-based Monarch Casino & Resort Inc. (Nasdaq: MCRI, http://www.monarchcasino.com), through its subsidiaries, owns the Atlantis Casino Resort Spa in Reno and several parcels of land adjacent to the Atlantis. It recently acquired the Riviera Black Hawk Casino in Denver and 1.5 acres of land adjacent to it. MCRI’s 52-week trading range is $7.05-$11.41 and market value is about $155 million. It closed Dec. 18 at $9.58, up 4 cents for the day.

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