Boyd stock price

Friday close—-26.01$. Yikes!!! Maybe all those Facebook posts they deleted actually were stockholders. Ok maybe only 10%.

 

I think it is time for me to start investing in gaming stocks again.
I have no luck at gambling in the casino.

 

Boyd should have used the money from Borgata to pay down debt. Instead the clowns in charge went on a buying spree (Aliante & Cannery) and are now saddled with 3.5B+ of debt along with the dividend obligation. Some more acquisitions recently.

They must be pretty desperate looking at the changes to BConned.

I used to have a good handle on Boyd but the debt scares me and have no clue about the new acquisitions.

 

As an investor I would agree the debt load is substantial, and if the price continues to head south the dividend will be the next thing that gets cut or eliminated.

 

The debt, while substantial, is financed at historically low fixed rates and should be manageable. The dividend is a joke--- why even have one that was paying .36% annually-- and not really pertinent in the long run. Casino stocks in general are getting hammered in the latest stock market downturn.

 

The sector is out of favour same like mining. This happened in 2008 and looks like we are going the same way except we are supposed to have the best economy right now. If the economy turns around then a lot of these companies are in trouble. I picked up MGM at $4 (that was a gamble all right - had already doubled from $2) but hard to touch it at $25 right now even though it is down from the 40's. Lucky for them Citycentre paid off though they have to give up 50% (Aria and Vdara).

On another note - the top official from Beijing in Macau jumped to his death (apparently from depression as per WSJ article) a week before the President opens up the bridge :-(

https://on.wsj.com/2z6bJVm

 

The recently issued $700 million in 6% senior notes due in 2026 is not very very cheap in my opinion. Historically cheap debt - Yes. But they had a chance to get rid of a lot of it and be flexible and nimble and pounce on competition when they were in trouble. They got into trouble in 2008 and should have learnt from that. They did upsize the deal from $500M to $700M due to demand. I think the rating was B-3 from the rating agencies. Analysts liked it (who does not when the bankers generate fees). The money was used for the 5 - 6 casino's they picked up from the Penn acquisition of Pinnacle.

I think they actually raised the divvy by a penny in Q2 (I may be wrong).

 

In reference to Boyd even if the economy goes south they will be fine as there debt is financed around 5-6%, they were smart to to expand when they did. Why pay off debt when one can significantly grow with cheap loans.

 

The Midwest acquisitions are solid for the price. The top grossing and 4th highest grossing casino in Missouri plus two other Cincy area casinos/racinos (the racino is nice imo) all for $575M is a good price, imo.

 

Thanks 93octane & Tring. One of the analysts did mention that these properties that they picked up did not have much competition and had solid cash flow and pretty much a desperate sale to get the acquisition with Pinnacle through by Penn.

The outlook on the CC by management was upbeat and Boyd was pretty confident about Vegas.

Something had to spook the market to have it fall 12% or so. Maybe catch up to the fall in WYNN and others. Will start nibbling away if it falls a bit lower with general market drawdown.

Macau for some reason scares me more than Vegas but Sheldon investing additional $2B. Sheldon has been smarter than me for the most part ;-)

 

It's going to be difficult to draw conclusions when the entire market has been down like this. We need to give it a couple quarters before BConnected can be blamed for poor numbers at Boyd. And even then, the question will be if it's the players club or the entire sector.

As for the new acquisitions, the Canneries are the only questionable ones. The new ones in the Midwest should do well for them.

 

Spend $40 M a year of interest (well, closer to $30 M after tax) to get the cash flow out of what they bought is a little different than borrowing a lot to build a megaresort which generates $0 of profit for years.

 

I didn't mean to imply that the stock price drop was related to the changes in the Bconnected program.
Down again today at $24.42.

 

It's getting ugly @Joe with seemingly no bottom to be found. Exec's had upbeat CC however this market is slaughtering casino stocks.

 

Thanks for the information on the new casino's. Went through the CC again. Management is definitely upbeat. The September numbers are out today from Vegas Gaming board and the numbers are good for Downtown and Boulder. Strip has losses in tables other than roulette. Slot coin in increased 3% or so.

Bought 3000 shares in the low 24's for Boyd on the drop today morning.

# MGM just had a huge beat but REVPAR in Vegas strip dropped 3.7%

 

If you have 1,530,000 shares, you made a million dollars today!

 

With that money better to buy your own VP machines and set the payout ratio

 

Pretty upbeat tone by MGM and solid results especially compared to a tough 3Q comp from 2017. Hopefully we seen the bottom for the gaming stocks. Las Vegas Sands is probably the best value from most of the metrics below $50.