Keith bought PNK in Hedgeye virtual portfolio since it hit his quantitative hurdles and we like the near term earnings outlook.



I was down in Houston for the Final Four (Huskies!) and took a trip out to Lake Charles to visit L’Auberge and the GM of the property.  L’Auberge is PNK’s largest property.  Our conclusion is that the property may be tracking well ahead of Street’s expectations in Q1 and the outlook for this year is quite promising.  L’Auberge should contribute to an estimate-beating quarter for PNK.  We'll have a full earnings preview out shortly.


We are currently at $25 million in Q1 EBITDA for the property but that number probably needs to go higher by another $2 million.  L'Auberge's Q1 should be a record quarter.  While March gaming revenues will be flattish to last year, profitability will be up handsomely due to better cost controls and lower promotional allowances.  The current GM replaced the Dan Lee hired GM and has been on the job for only 6 months.  From my visit, I’m fairly certain that we are in the early innings of significant improvement at this property. 


PNK has gained or maintained market share on a 12-month rolling basis in each property since Q4 2010.  In addition, of the regional states that have reported revenues, March has been above expectations.  We continue to like PNK and most of the regionals as we head into the Q1 earnings season.



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