I’m not necessarily making a call on ISLE although I am biased to the long side. The $95 million in insurance proceeds from Hurricane Katrina will help the balance sheet, and the company’s liquidity position was already in decent shape thanks to Dale Black, CFO. The suspension of Capex, as announced today, is another good liquidity move.
However, the stock is essentially an option, and there are probably better risk/reward opportunities on the short and long side elsewhere. I do think the investor reaction to these horrendous operating numbers is quite positive for other regional gaming stocks. This may signal a bottom for stocks such as BYD, PNK, and PENN. All of these companies have ample liquidity and are not going away.