Crown Casino: Strategic Viewpoint, page-5

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SlickJohnWick

558 Posts.

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19/10/20

23:00

Post #: 48217937
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Originally posted by noomxx: ↑

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.

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I see value as well but just watching for the moment

CWN Price at posting: $8.25 Sentiment: None Disclosure: Not Held
1 Upvote

0 Great analysis

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Crown Casino: Strategic Viewpoint, page-5

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