LACO : a tale of hidden assets

Hey, it has been a while since my last write-up. I’m following my stocks and making few investments here and there but I’ve been lazy on this blog. I thought new development at Lakes needed attentions.

Evitts

It is now in operation and meeting rooms are opening Monday next week. Results are ramping up but we can count on 0.5 to 1M EBITDA per month in the following year. I expect 7M profit on Evitts next year for a value (8x EBITDA) of 56M against a debt of 15M for a net value of 41M. By the was, the debt interest rate dropped to 5%!

Penn and Tribes

We received the cash! There also is a pending note of 60M that must be paid if the casino opens. It is planned to open in 2014 (let’s assume 2015) so we could get a new receivable of 60M from hashes. I love those kinds of surprises. There also is a land that should be purchased by Penn during construction (they took an option on it) at 7M value.

Rock Ohio

Casinos are not rocking has planned. They are making shy of 20M in revenues a month versus planned 25-30M. It is profitable but not pumping money. The original investment value of 18 bears interests at 15%. The actual value of the 20M invested in Rock is now worth (officially) 25M.

Rapid global valuation

Cash on hand 90M
AR adjustments (33% chance the 60M gets paid) 20M
Land 7M
Rock Ohio Venture 25M
Evitts 41M
Total 183M

Disclosure : Long LACO.

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