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I like cash flow, especially if it's free. Buying the regional gaming operators at a forward free cash flow yield over 15% has historically generated outsized returns. I understand that FCF yield is a function of price so the two often move in opposite directions. However, even buying in at the beginning of the valuation cycle rarely has lead to significant losses. By my calculations, the regional gaming operators (ASCA, BYD, ISLE, PNK) are trading at an average forward free cash flow yield of 18%, very attractive indeed, especially in light of the historical precedent. The last time yields crossed the 15% threshold was the 9 month period from December 2002 to August 2003. This turned out to be a very opportune time to invest in the regional stocks. Buying the index at the average price during this period would've yielded a 125% return over the next 9 months. Even if one bought at the peak, the return would've still been 100%. Looking back even further to the elongated period of high free cash flow yields 8/98-7/2001, buying in at almost any point would've generate positive returns over the subsequent 12-18 month period. Can money be made in the current FCF cycle? Only time will tell but history and valuation support the long view. We've got our eye on PNK.