Robert Lauzon Gamehost Inc GH-T BUY Jan 06, 2010

Discretionary name, casinos in Alberta. The stock is only up about 20 from the lows. Management owns about 48%.

Have casinos in Fort McMurray and Grand Prairie as well as Edmonton. There could be some impact on a short-term basis because of the forest fires in Alberta. Have very strong margins. Would take advantage on any price weakness.

Has 3 casinos, all based in Alberta. With the downturn in the Alberta economy, this has been fairly hard hit. The fire in Fort Murray is going to have a big impact on the 2^nd quarter. Insider ownership is generally a good thing, but the downside is that liquidity has always been an issue with this company. Prefers Great Canadian (GC-T) which is a little more diversified and not focused in Alberta. Dividend yield of 5%.

(A Top Pick April 25/16. Down 6.87%.) Operates 3 casino properties in Alberta. One of its main properties was in Fort McMurray. Since he recommended this, they trimmed their dividend, a correct move because of the uncertainty. They have now reopened the properties. When a stock doesn’t go down that much with a whole bunch of negative news, the market is looking past the shorter term events.

They have hotels and casinos, a very well run company. If you put together a portfolio for Alberta’s economy including this one, you are probably getting it at a low.

A casino company. It is pretty defensive. They own three casinos in Alberta, where there are no new casino licenses being issued so there are very high barriers to entry. Oil prices have improved over the last couple of years and so is the Alberta consumer. They have a strong balance sheet. (Analysts’ target: $11.40).

(A Top Pick Jul 23/18, Down 20%) A well-run operator of Alberta casinos. He sold GH to buy Great Canadian Gaming in the same sector, because it was trading at a more modest valuation.

GH has been steadily climbing over the past few years, and it has a dividend yield of 4.6%. Analyst estimates have mostly been rising for the name, and its valuation has mostly contracted over the past few years while its price has grinded higher - a trend that we like to see. Free cash flows are strong, and it boasts a shareholder yield of 11.4%, made up of a 2.2% buyback yield, debt paydown of 5% and a dividend yield of 4.4%. Its recent momentum has been strong, up 20% on the year, but including dividends, it has basically been flat since 2014. Management has done a good job of controlling costs and improving margins. While forward growth is expected to be minimal, at a 10.7X forward earnings valuation and with a strong shareholder yield, we think it looks interesting here.
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