Van I'm trying to get a handle on Full House-
Seeking Alpha art-
Background
What originally drew me to the stock back in 2014 was the news that an old industry colleague, Daniel R. Lee, headed the group that had acquired the failing predecessor casino company. I'd first met Dan Lee when he was an analyst at the old DLJ brokerage in the early 80s. Ten years later, we worked together when he was an investment banker at First Boston involved in our prepackaged bankruptcy deal at Trump Taj Mahal. Dan later came into the industry working as a CFO for Wynn and beyond that CEO of Pinnacle Entertainment prior to its acquisition by Penn National Gaming (
PENN) in 2018. Dan had left Pinnacle in 2009 over a kerfuffle with Missouri regulators.
He then became a casino developer. Dan combined frontline casino management savvy with his banker's mentality to create a situation in FLL I saw as a promising entry.
FLL's portfolio includes 5 properties in Mississippi, Indiana, Colorado and Northern Nevada, generating $164m in 2019. In its most recent
release for 3Q20, the company showed y/y a positive tone in its Silver Slipper Mississippi unit's revenue during pandemic affected 2020 and only modest declines in Indiana and Colorado. Under Lee's team, FLL has streamlined management, got a control on costs and instituted marketing programs and property improvements that are still in the process of being fully realized. We think post pandemic, by 2Q21, the prospects for FLL turning profitable are strong. In brief, we think, given Dan's background among other developments, make this a transaction stock for 2021. Either FLL will expand its footprint or a large regional player in the space will see the potential of buying the company with a very attractive, manageable premium.