Analyst names Station Casinos ‘All-Star’ of gaming industry

Wednesday, April 12, 2000 | 10:38 a.m.

Prudential Securities gaming analyst Joe Coccimiglio named Station Casinos Inc. to the top spot of his land-based casino operator "All-Star Team," citing powerful returns on investment for the Las Vegas locals casino operator.

The rankings are based solely on cash flow returns on capital investment during 1999, which Coccimiglio calls "a strong indicator of how effectively a company is allocating the right capital in the various U.S. gaming markets." Two Station properties had notable returns in 1999 -- Boulder Station, with a 34 percent return on investment, and Palace Station, with a 32 percent return. Boulder Station's 34 percent return was the highest of any land-based casino in the study.

Second place on the land operator's list was held by Mandalay Resort Group, led by the Excalibur and the Colorado Belle-Edgewater in Laughlin. Harrah's Entertainment Inc., Park Place Entertainment Corp. and Mirage Resorts Inc. rounded out the top 5.

The true stars of the study, however, were riverboat operators, led by Argosy Gaming Inc. of Alton, Ill. Argosy's casinos were led by the Alton Belle, with a 47 percent return. Boyd Gaming of Las Vegas took the No. 2 position, while Harrah's was named 5th.

The rankings were borne out by stock performances, Coccimiglio said -- in 1999, Argosy's stock soared 479 percent, while Station rose 174 percent.

The strongest overall market for returns on investment, the report said, was Northern Illinois and Indiana, where casinos averaged a 39 percent return. This vastly exceeded the 13 percent return posted by Strip casinos in 1999.