Why Red Rocks Resorts Is Surging: An Interview With Todd Jordan

02/16/18 01:20PM EST

Editor’s Note: Our Gaming, Lodging & Leisure (GLL) analyst Todd Jordan has been bullish on Red Rock Resorts (RRR) prior to its IPO in April 2016. Shares have risen 85% since. Below is commentary from a quick chat we had with him this afternoon. 

Why Red Rocks Resorts Is Surging: An Interview With Todd Jordan - z red hedgeye

Takeout speculation is driving the stock higher today.

The story appeared that Chairman Frank Fertitta may be looking at buying the Carolina Panthers.  He might need cash and/or could be forced to sell his stake in RRR by the NFL. 

Might be easier to sell the whole company.

On a stand-alone basis, we think RRR is worth in the mid $40s.  A PE firm, or larger casino operator, could be interested which likely include a sale of the substantial land holdings to a REIT.  It would be worth north of $50 in that scenario.  It’s all speculation right now

To be clear, our call is not based on any acquisition scenario. Rather, we think this is one of the best (if not the best) long-term story in our Gaming, Lodging & Leisure (GLL) universe.

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