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Penn National Gaming Inc. Message Board

  • dundarra dundarra Jan 22, 2005 12:25 PM Flag

    Say it ain't so, Finster

    Finster, I find it disquieting that you have sold out your position in Penn.

    For many years, I've enjoyed reading your insightful (and accurate) commentary regarding our company, as it grew from a minor league racetrack in the middle of nowhere, to the 3rd largest gaming company in the world.

    Like you, and several others here, I am sitting on huge gains with Penn. I've been tempted to cash in too, but I'm hanging in. To me, the future still looks very, very bright. Besides the obvious (PA, Maine, NJ, Argosy), consider:

    * Penn will have debt, but as Cristopher said in his last roadshow presentation, Penn will have a "staggering" amount of cash flow available to service, and pay down, this debt. And Carlino said "debt reduction" is like a mantra to the company. Also, Argosy's properties are in great shape and will require little or no investment. Obviously, debt reduction will lead directly to increased profits.

    * Penn and Argosy both have just finished up terrific quarters. CT has already had 2 $7MM weeks this year (in January!), which already puts them $3.5MM ahead of 2004's pace. Business is very, very good.

    * In my opinion, MD is no closer to slots than they have been before. Those that have blocked it in the past are still opposed. Just yesterday, a spokesman for the Governor's office said, although they will introduce slots legislation again next week, they are not optimistic that anything will become of it.

    * WV will probably move on table games in the next several months. I believe this could lead to an explosion of profits at CT, as it makes CT more of a destination. Imagine CT as the only full-fledged casino in the DC/Baltimore market. (To get an idea of the potential, Foxwoods EBITDA is approximately 2.5X CT.)

    I'm actually revising my own 2008 earnings estimate upwards because business looks so good. I say $6, with a stock price about $120 3 years from now.

    Best of luck with Youbet. I tried it for a while, great technology, but I like to do my betting at the track.

    Thank you, Finster.

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