2012 SWS Yale chapter year in review stock profiles All charts from purchase date to market close on 4/27/12. In order from date of purchase.
Full House Resorts (NYSE: FLL) 4.72 % of Current Portfolio Full House Resorts is a casino and entertainment company. It has joint venture in Gaming Entertainment (Delaware), LLC with Harrington Raceway, Inc., which manages Harrington Raceway and Casino in Harrington, DE. Additionally, the company owns 50.0% of Gaming Entertainment Michigan, LLC in Battle Creek, MI and owns Stockman’s Casino Inc. (Stockman’s) Casino in Fallon, NV. Recommendation: Why we invested in December, 2011: Buy at $2.57 on 12/12/11 1. Strong fundamentals FLL has had very strong revenue and earning growth for the last few years. Its free cash flow more than doubled to $24m over the years 2010-2011, the company hisorically only had FCF in the single digits. Versus its industry peers, it has healthy debt to equity ratios. Its current ratio was previously in the double digits but is now around 1.5, suggesting that the company reinvesting its cash effectively. 2. Attractive Valuation Given its attractive levels of cash and free cash flow growth, FLL’s price to cash flow is extremely attractive at 2x versus an industry average of around 10. 3. Focused management vision In recent months, company insiders have increased their holding of shares. Their business model is to invest in companies that “cater to a local customer base, have good to great demographics, and have easy accessibility” at reasonable prices, and their recent JVs and acquisitions demonstrate potential to significantly increase future earnings. The company’s main source of revenue is management fees, which is accretive to earnings.
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