Anyone still own/follow this name?
Stock has been working higher but fundamentals in WA deteriorating and NV casino has yet to earn what management originally guided to.
Balance sheet is in good shape and they have ~25% of market cap in cash on hand... should generate another quarter of decent cash flow too...
A couple of things worry me: WA minimum wage hike is going to hurt by $400k on top of the 30% decline in EBITDA so far this year, tax assets running out, buyback seems stupid to me as stock is illiquid and they are perfectly happy issuing shares at any price for deals, cash sitting on the B/S and no idea as to how they plan to use it...
Anyone have any thoughts here?
I still look in on the company from time to time, but I no longer have a position, nor do I plan on initiating one...
I think your assessment is largely on target. The company is doing kind of sort of OK....
BUT their Dakota acquisition has largely been a turkey...Nevada is kind of sort of OK...but no great shakes. WA is having trouble, bad weather, higher minimum wage, etc.
One thing that I think has been unmentioned and that I see in my personal life is that poker is kind of on a downturn...One big problem with poker is that after a period of time (6 months, 1 year, 2 years) the local area is going to have winners & losers. Obviously, most players are going to be losers. The losers will play, win a little, lose a lot, and then they stop playing OR cut back by like 75%. Poker has to have a continuous inflow of NEW MONEY, NEW PLAYERS to have a healthy ecosystem.
In the Detroit area, I see lots of "regulars" who play for a while, then they bust out and disappear.
I imagine the same thing is happening in WA.
UWN is doing OK, but nothing compelling. Management is OK, but they aren't big enough to take on any really meaningful deals. The company is too small, has marginal assets, so they aren't of interest to a bigger player...
End result is they are stuck in a bad spot...
