Great Canadian Gaming Corp (GC.TO) Buy, Sell…

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Great Canadian Gaming Corp (GC.TO)

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44.98

-0.00 (0.00%)

as of Sep 22, 2021, 8:00:00 pm Market Open.

28 watching

WATCH

He's watching it. GC has come off, but he's uncertain why. Wait and see. A hold if he already owned it.

PAST TOP PICK

(A Top Pick May 24/18, Down 12%) He still likes them. The recent quarter saw revenues grow by 35%. They are investing in the future by adding square footage, so earnings will be a little chunky. It trades 16 times earnings and they have 10 year contracts to manage casinos and there is no real competition.

DON'T BUY

Stars vs. Great Canadian Gaming A great combo. Once he was long the Stars Group and short GCG, though he's still long GCG. The Ontario bundle was good for GCG, but there's too much uncertainty here. Expectations rose too high. Now, there's too much uncertainty in Vancouver with a money-laundering investigation. He liked GCG before the valuation is too high now. Stars is more interesting, because they bought as many assets as they could in online gambling which is popular around the world while sports betting is gradually being legalized in North America. He likes Stars. There's strong potential growth in this space, like 10%. Stars will capture a large market share.

DON'T BUY

Very volatile. We're now right at the trendline around $44-46; you don't want to see it break below that. If GC can't hold this level, it will likely sink back to $40. Today, Great Canadian reported a decline in money spent on chips at its casino tables, hit by anti-money laundering rules.

BUY

They have greater operations in Ontario now. There was controversy around the bidding process. It has been a volatile ride. Growth metrics are excellent. They can fund a lot of their operations thought cash flows but have had to take on some additional debt. Their runway for growth is good and they have a good moat around their business. He likes them. Gambling tends to be recession proof.

BUY

They are a casino operator. They have won a bunch of contracts in Ontario. It is hard to compete with them because of the restrictions and regulations. They are updating some of the older casinos. There is a nice long term recurring revenue stream. He likes this name.

PAST TOP PICK

(A Top Pick Apr 24/18, Up 47%) They have a strong position in BC gaming and are bidding in Ontario. He's trimmed his position, but really likes this still. GC basically has a monopoly on gaming in Toronto, and are building across Ontario. Toronto is underserved with lots of demand, so it will be lucrative for GC. He'll own this for the long haul.

COMMENT

There was a short report on them a few months ago that suggested they landed a tremendous deal in Ontario but it went wrong. They have an aggressive growth plan to build their casinos, which requires a lot of capital. During a downtown, gambling is recession proof. High ROE.

COMMENT

GC-T vs TSGI-T He does not own either right now. GC-T probably offers highs growth opportunity with their expansion plans in Ontario. TSGI-T is trying to convert poker players into their higher margin casino and sports book.

TOP PICK

Has owned it for over a year. They started with BC casino and have expanded to Ontario. They almost have a gambling monopoly in Toronto for 20 years with developments in the Woodbine Casino and in Durham. Good demand here for gambling. (Analysts’ price target is $59.00)

TOP PICK

The stock got decimated by one little short report. But they are 4 years ahead of schedule on their gambling revenue. This stock should go higher on revenues from their latest casino opening. (Analysts’ price target is $59.00)

BUY

Likes it. Just won contracts in Ontario which he thinks are undervalued--20-year contracts with the potential for growth by growing the square footage. Has little competition due to government regulation. Probably more than a 15x multiple. Long-term potential; they'll have to invest in these facilities, so be patient. They've been very transparent about the River Rock casino in BC as authorities investigate money laundering allegations.

DON'T BUY

The first few quarters since the GTA bundle blew the doors off, but there isn’t much transparency to that agreement. Some analysts have a sell on it because they believe that there is a tipping point in the agreement, so that if revenue goes down a little bit, cash flow drops near zero. He believes that he has a small short position in the company, mainly from a valuation perspective. There is also ongoing risk from an ongoing investigation into money laundering in BC. Nothing incriminating of Great Canadian has come from this so far, but it is a risk that is not publicized enough, creating a basis for a short.

DON'T BUY

They own Brookfield Business Partners (BBU.U.T) instead, which contributed significant capital to a joint venture with Great Canadian, who is running the Woodbine investment. A lot of volatility with this name. Not the most consistent income stream.

HOLD

It had a big spike in the spring above $50. Right now, it's around $45. With the next earnings report, this could go either way, up or down. This stock could test the range of $38-44. It's volatile. Hold if you're long term. He expects this to test $44.

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Great Canadian Gaming Corp (GC.TO)