In general, the entertainment industry has a good week as the stock market closed positive – 0.1% relative to the S&P 500, which drops sharply in recent years. The shares of most casino operators fell, while the biggest losers in the last week were Nevada Gold & Casinos (UWN) (experienced a decrease of 6.5%), and Full House Resorts (FLL) (experienced a decrease of 3.0%).
Full House Resorts, the company founded in 1987 and incorporated in Nevada, owns and operates a number of objects related to the gaming industry. In total, it owns 5 casinos located in the United States.
The last price per share was $1.28, while the market capitalization of the company equals $24.9 million. Since the beginning of the year the share price has already dropped by 53%, but analysts are showing cautious optimism: some of them are assigned shares rating to ‘hold’, others – to ‘buy’. But there are some weak indicators to take into account: a reduction of net income, the rate of return on invested capital is reduced and a low free cash flow. In terms of net income FLL dynamics lags behind the S&P 500, and from the leisure industry in general. In the third quarter of the last year, the report published announced a $0.04 million loss and this year the loss is stated at the level of $8.5 million, which is an incredible 20,000% deterioration. In general, the profit of the company has been steadily declining for the past two years. But, according to the consensus of experts, in the next year we can expect an upward trend change. In this sense, the current decline in prices is attractive to investors in the expectation of future profits.
UWN loses positions
Another disappointment of the bygone week was Nevada Gold & Casinos (UWN). The corporation, also based in Nevada, runs 11 casinos, primarily located in the states of Washington and South Dakota.
By the close of the market on Friday, the price per share was $1.15. The average volume of traded shares per day is 20, 000; market capitalization – only $19 million. Online casino DGFEV.de gambling experts, sharing financial reports on a monthly basis on their official website, this fact holds the business from entering the top league. Since the beginning of the year the share price has fallen by 10%.
Most analysts assigned shares rating to ‘hold’, seeing some of the manifestations of the power in its behavior. The revenue growth of UWN is slightly ahead of average for the industry though: over the past 12 months, revenues were up 1.5%. Coefficient value of the debt per share is 0.42, which is not too much, and below the average for the industry. This indicates a good disposal to borrow. The gross profit of the company for the last 12 months has increased and now stands at 37%, which is a good indicator indeed. Earnings per share for the same period have also slightly improved, although the growth lags behind the growth rate in average for the industry and the market in general. All these factors are evidence that the company has the stability and capacity.