Posted: Oct 17, 2021, 7:00 a.m.
Last update on: October 17, 2021, 02:29 PM.
Monarch Casino & Resort (NASDAQ: MCRI) could assess merger and acquisition opportunities, and the best debt consolidation company could double its portfolio of gaming assets in three years, according to an industry expert. It was then that he accelerated what has been a profitable expansion at his integrated complex in Black Hawk, Colo.,
Howard Jay Klein, author of The House Edge investment newsletter, says Reno-based Monarch “has reached the point of being a trading stock.”
Its price has now become a valued currency that could be part of an acquisition. Its excellent track record makes it easy to fund a deal for an operator of equal or even larger size, âKlein said in a recent report.
Shares of Monarch, which owns Atlantis in Reno and its namesake site in Colorado, have risen more than 46% in the past 12 months and 11.27% since the start of the year. Currently, Monarch is the smallest publicly traded games company in the United States by number of properties. This could change either through additions to its portfolio or through the entry of unique casino operators into the market best debt consolidation company
Potential candidates for the monarch
With a 6% gain over the past month, Monarch had a market cap of $ 1.26 billion as of October 15.
While Wall Street hasn’t mentioned the specific companies Monarch might target in a takeover, the list of public operators below the market value of the owner of Atlantis is small. They consist only of Century Casinos (NASDAQ: CNTY) and Full House Resorts (NASDAQ: FLL), while Strat owner Golden Entertainment (NASDAQ: GDEN) is slightly taller than Monarch.
With lower net leverage than its peers, Monarch could participate in the consolidation of the sector until the end of the year or at some point next year. The company has not added any other property since purchasing the Colorado site in 2012. As Klein notes, the operator reduced its debt from $ 25 million to $ 146 million, indicating that its balance sheet is solid – an asset if he decides to go shopping.
“The realistic pool of potential acquisition candidates is shrinking rapidly, so we believe MCRI will be called upon to act while assessments are still within its financial reach,” he said.
Full House a possibility?
Noting that this is a ânotional deal,â Klein poses Full House as a potential target for Monarch. The former is seeking to expand its presence in Indiana, obtain a license in Illinois, and also has casinos in Colorado, Mississippi and Nevada.
Klein says the combined company – if a marriage were to be consummated – could reach $ 655 million in revenue by 2023 and earnings per share of $ 4.35 to $ 4.85.
At first glance, Full House would be easily affordable for Monarch, as the latter’s market value is more than triple that of the former. Such a transaction would achieve the goal of expanding Monarch’s casino portfolio.
But it remains to be seen whether this firm is interested in markets like Indiana and Mississippi and, as Klein notes, whether the Farahi family is willing to see its stake diluted. The Farahis are the largest owners of Monarch shares.