Is it worth gambling on a casino stock? Very possibly if the stock in question has gained 37% year-to-date. Enter, Century Casinos (NASDAQ:CNTY) and CNTY stock, which is selling for $9.87 USD at present.
This small-cap play in the entertainment industry has been, historically, a side-ways moving stock. Well, actually it has steadily moved upwards, but slowly, over a period of five years. As such, you could say it continues to deliver solid gains, but that period has not been without its troubles.
Century Casinos runs operations in Poland and Canada, along with a newer small business running a fleet of cruise ship casinos. The company’s market cap is a tiny $290.5 million USD.
Century and Eldorado
The company hit the headlines in mid-June for cutting a deal with Eldorado Resorts (NASDAQ:ERI). The news caused CNTY stock to surge by 12%. However, shares did correct soon after.
The deal sees Century pay $107 million for control of three US casinos. At the same time, REIT company VICI Properties will pay up to $278 million to acquire the casinos’ land and real estate assets. Century Casinos will then be required to pay VICI an annual rent of $25 million on the three properties for the first 15 years. The company will also be given four five-year renewal options, thereafter.
Investors should know that even after its latest acquisition, Century’s balance sheet remains in good shape. According to InvestorPlace:
“Earnings are growing despite macroeconomic weakness in western Canada. And the small-cap stock, on a peer basis, remains cheap.”
Though CNTY stock has already climbed an impressive 37% year-to-date, there is very likely further upswing ahead.
The company has its pick of small- to mid-sized properties to target “if it wants to replicate Eldorado’s successful growth-by-acquisition strategy.”
Based on its performance year-to-date and a current price that remains very cheap, investors should keep their eyes peeled on this small-cap play.
What are your thoughts on CNTY stock?
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