In my opinion Crown is a long term stable profit generator (but ex growth) with high barriers to entry, and an artificially low Return on Equity as a result of two factors: a) It owns the casino buildings and land (hence high NTA of around b) It has relatively low debt.
Earnings have fluctuated within a trend of around 45-65c and dividends around 37c-60c with franking credits that fluctuate between partially and fully franked (when dividends are higher franking drops to partial).
PE tends to fluctuate around the 18-21 bandwidth.
Therefore assuming these conditions continue into the future (ex-covid), I think Crown has a fair long term value of around $12.00
I think the current government inquiries into Crowns practices has given an opportunity to acquire the shares at good long term value. I believe these government inquiries could incur some short term financial pain, but strategically on a long term, ex-covid world, Crowns profits will recover to its historical norms.
I acquired a decent 1st position today at $8.20. If the opportunity permits I will dollar average downwards at $7.80, $7.50 and $7.00 (ie purchased 25% of my desired full allocation today).
Given the high quality of Crowns underlying assets I would be happy to have Crown as 10% of the share portfolio if the price is right.
CWN Price at posting:
$8.30 Sentiment: None Disclosure: Held
