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Non-Tech : Argosy Gaming Co. (AGY) -- Ignore unavailable to you. Want to Upgrade?

To: Ram Seetharaman who wrote (158)	5/3/1999 5:42:00 PM
From: Grant Hurford	Read Replies (2) \| Respond to of 259

AGY said in the 10Q released today that if the situation at Baton Rouge didn't improve soon they would start writing off their $150 mil investment there. I sure don't like the sound of that.

To: Ram Seetharaman who wrote (158)	5/22/1999 12:13:00 AM
From: ChartMan	Read Replies (1) \| Respond to of 259

"AGY is going to be bought out by the end of the year." Here's why: Take a look at what management is doing. They are dressing this baby to look good for the buyer. Now that the "L" boat is a reality vs. an idea, they can use it to secure better financing. Look at what S&P and Moodys have to say about this after they raised AGY's credit rating: The outlook revision reflects Argosy's "increased financial flexibility and improved interest coverage as a result of the recapitalization. Also, first-quarter 1999 operating performance showed continued strong results from the Lawrenceburg, Ind. property and improved results at the company's other four casino properties," S&P said. Moody's said: "The ratings reflect Argosy's dependence on a single casino for the majority of its cash flow; potential competitive pressures in Indiana from the planned development of a competing casino by Hollywood Park; a potential increase in leverage should management buy-out the remaining partnership interest in the Lawrenceburg operation; and its high balance sheet leverage. ... Finally, consider what the management said on April 27th; In closing," Perry said, "We continue to monitor interest rates and market conditions to determine the appropriate time to pursue our financial strategy of improving our capital structure by reducing our cost of capital while retaining the flexibility to grow. Our primary goals remain the same -- to be the premier riverboat casino operator and to further enhance shareholder value." Further enhance shareholder value..... That says it all. The best way to do that is to prop up the company so it gets taken out. Using your figure of $14 mil. in saved interest expense per year with the new re-fi and taking 28mil. shares outstanding, I see an EXTRA $0.50 EPS. Not to be greedy, lets add that to LAST year's $0.23 EPS for a total of $0.73 EPS. Closed @ $7.50 today. PE=10. Cheap-Cheep. Apply a low-end average multiple of the gaming industry of 20 and I see a $14 stock. Mix in a little accelerating EPS and the fact the partners need settle up this year and I see AGY getting taken out. There's even a FUND betting on this too. Buffalo Small Cap. -snip- Buffalo has a total of 68 stocks in its portfolio, with an annual turnover rate of 34%. Its expense ratio is 1.02%. Argosy Gaming Co. (AGY), an Alton, Ill., company that owns and operates riverboat casinos, is the fund's largest holding at 3.4%. Ethan Allen Interiors Inc. (ETH), a manufacturer and retailer of home furnishings located in Danbury, Conn., is the fifth-largest holding at 2.6%. Gasaway said Argosy was a stock that had fallen under the radar screen of most analysts, partially because it had a lot of high-cost debt. But new management was hired about a year ago, including a new chief executive, and Gasaway said Argosy is now posting better numbers and is refinancing its debt at a lower interest rate. Argosy has been in the fund since it opened, when it was bought for between 2 and 3 a share. It's now trading above 7. -snip- I wouldn't call it "Dreaming" anymore if I were you. Hope that helps.