Week ended November 20 in review
For the week, Intrawest fell 0.2% on the TSE and closed unchanged on the NYSE.
Such flat trading belies this week's trading drama. Monday's negative earnings surprise (Intrawest reported an EPS of $-0.05, 20% worse than the -$0.04 that was expected for the quarter ended September 30) held the potential to punish investors on Tuesday.
Thankfully, the FED came to the rescue with a double 0.25% rate cut Tuesday afternoon. Given the prevalence of debt on Intrawest's balance sheet, Greenspan's concern about international liquidity provided support for ITW.
This gave investors some breathing room to incorporate statements made by Joe Houssian, Intrawest's chairman, president and chief executive officer at the company's Annual General Meeting last Monday.
Houssian pointed to average growth rates of 54% for EBITDA and 56% for income per share over the past 5 years. Moreover, during this time same-resort skier visits have grown by 9% per annum, crushing the industry average of 1%. Real estate sales, an important element in the Intrawest equation, were very positive during the quarter. Sales of $65.3 million generated operating profits of $11.6 million, up significantly from $3.4 million last year.
The news going into this season looks equally positive. Across Intrawest's network of resorts, 1999 season pass and express card sales are up 34%, year over year. Lodging bookings are also up from last year, increasing 15% year to date.
Other positive news?
1. Whistler opened early for limited skiing on Friday.
2. It looks like Whistler's Café de Columbia FIS World Cup alpine races, December 5th and 6th and the Nokia FIS World Cup Snowboard Super G on December 10th will be a go.
3. On December 1, the Canadian Olympic Association will announce which Canadian site will be submitted for the 2010 XIX Olympic Games (Whistler, Calgary or Quebec City). Remember kids, Intrawest just signed a three phase option development agreement with Solitude Ski Corporation (Utah), site of the Salt Lake City 2002 XIX Olympic Winter Games. Are these guys aggressive, or what?
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All this continues to confirm my long positions. In the coming week, I will be looking for slow movement to the top end of the $22.50 - $26.50 trading range. My December target remains $28.
Thomas |
