Analyst Suggests Golden Might be a Profitable Asset Rather Than an Investment
April 24, 2025, 06:32h.
Last updated on: April 24, 2025, 06:32h.
By Todd Shriber @etfgodfather Read More Financial Gaming Business Mergers and Acquisitions
A little speculation never hurt anyone, right? In his most recent report, analyst David Bain from Texas Capital Securities suggested that Golden Entertainment (NASDAQ: GDEN) might entertain selling itself down the line.
Now, this is just guesswork on Bain's part, but he pointed out that Golden Entertainment might opt for maximizing shareholder value instead of expanding its portfolio via acquisitions.Golden hasn't released any public statements expressing interest in selling, but Bain reckons multiple bidders would show up if the company did decide to go that route.
"GDEN's focus may switch from long-term 'empire building' to clinically maximizing shareholder value in a sale of the company," Bain comments. " GDEN's portfolio offers several strategic opportunities that could attract numerous potential buyers, in my view."
ever since Golden unloaded the Rocky Gap Casino Resort in Flintstone, Md. and shed its distributed gaming operations in 2023, the operator has been zeroed in on running casinos in Las Vegas, Laughlin, and Pahrump. Golden's substantial footprint in Clark County, Nevada, that's expanding 3.8x faster than the national average, according to Bain, makes it a tempting target.
Past Choosiness in Acquisitions
Golden hasn't openly stated that it would consider selling the company, but management has made it clear they'll only be interested in potential acquisitions that are beneficial.
"GDEN evaluates potential strategic acquisitions, though it leans more towards continuing/augmenting return of capital policies given its view that its own equity is undervalued, combined with elevated seller valuation expectations, in my view," Bain added.
This sentiment mirrors the comments made by Golden CFO Charles Protell earlier this year. On a call discussing the company's fourth-quarter results, Protell stated, "We probably won't be interested in deals requiring us to build new gaming venues from scratch, nor would we be a likely buyer of individual assets."
This suggests that if Golden does flip through the good-looking listings, it would likely be for multiple gaming venues in a single transaction, or perhaps even gobbling up another company, although management hasn't indicated that either scenario is imminent.
Real Estate on the Menu?
If there's a rumor floating around about Golden that might have some substance, it's the possibility of the operator selling some or all of its real estate to boost shareholder value. Golden has admitted that this is under consideration.
"The Strat" is Golden's shining jewel, located near the Las Vegas Strip, and it could bring a significant piece of Golden's $686.79 million market capitalization in a potential sale. Bain pointed out that sale-leasebacks could bump up the operator's share price.
"GDEN owns its operational real estate and over 60 acres of spare land, including 9 Strip acres. In a sale leaseback transaction, we estimate land value to surpass $33 per share, and earnings before interest, taxes, depreciation, and amortization (EBITDA) from operations would add another $8 per share," concluded Bain. " At no cost to Golden, it could also partner with developers to generate direct and indirect revenue on its unused land."
- Todays rumors in the financial world suggest that Golden Entertainment, a key player in real estate and gaming business, might consider selling itself in the future, with analyst David Bain from Texas Capital Securities predicting multiple bidders could appear if the company decides to go this route.
- Golden Entertainment's potential shift towards maximizing shareholder value instead of expansion through acquisitions has been speculated by analyst David Bain, who sees the companys portfolio as an attractive target for multiple buyers.
- The recent unloading of the Rocky Gap Casino Resort and shedding of distributed gaming operations by Golden Entertainment has led to a focus on casinos in Las Vegas, Laughlin, and Pahrump, making the company a tempting target for mergers and acquisitions in the real estate and gaming sectors.
- In the past, Golden Entertainment has shown choosiness in acquisitions, only considering deals that are beneficial and favoring return of capital policies over new gaming venues or individual asset purchases.
- Another intriguing rumor surrounds the possibility of Golden Entertainment selling some or all of its real estate to boost shareholder value, with the potential sale of "The Strat," a key asset near the Las Vegas Strip, being mentioned as a significant move that could increase the company's share price through sale-leasebacks or partnerships with developers.
