Wednesday, October 13, 2010

Stock of the Week: Sky City Entertainment Group Ltd



I know some of you might accuse me of favoritism because I have a large position in Sky City Entertainment Group Ltd [SKC.NZX] in the Share Investor Portfolio but go ahead and do your worst. I believe I am being as unbiased as I can be and I will try to argue my case below. I also picked it as a stock of the week in July 2009.

I think this stock is a good buy at current levels and it looks like the market is showing further share price weakness as 2010 progresses but I cant understand why the share price is heading south. The market is sometimes wrong is where I am heading here. Having said that CEO Nigel Morrison has indicated that Australian expansion is on the cards and the company has plans to spend money on expanding their convention centre offering and the company doesn't have a good history under the previous CEO of making these kind of capital spends translate into profits. I think Morrison is a more careful sort of beast when it comes to expansion and the returns expected and made from them.

Its 2010 full year profit was a record one and it looks like its 2011 year is going to top that as well according to Morrison - he is looking for 10% growth. Add the rugby world cup into the mix and 2011 is going to be a great year for the company.

The gross dividend return of 8.41% alone makes the stock a good investment proposition.

The stock has been trading in a tight range of between around $2.80 and $3.05 since May and patient investors will get this stock cheaper if they wait. I am contemplating buying it between $2.70 - $2.80 to use up my dividend pool from 2010.

I believe that the current share price of $2.92 doesn't reflect its good prospects in 2011 and beyond. It is only one of a few stock prices that hasn't significantly improved as many have over the last year, due to perceptions that the economy is doing better and so it is worth looking at.

I also believe the market is discounting the good management of the company for the past two years and it seems it is skeptical that the company can continue to grow profit as it has done under Nigel Morrison.

I think they can.

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Sky City Entertainment Group @ Share Investor


Sky City set to lose National Convention Centre bid
Sky City Entertainment Group: Australian Acquisition on the Cards?
Sky City Entertainment Group Ltd: 2010 Full Year Profit Analysis
Sky City Entertainment Group 2010 Full Year Profit Preview
Chart of the Week: Sky City Entertainment Group Ltd
Share Investor discusses Convention Centre proposal with CEO Nigel Morrison
Share Investor Q & A: Sky City CEO, Nigel Morrison
Sky City Entertainment: CEO Nigel Morrison discusses 2010 HY
Sky City Convention Centre Expansion a Money Loser: Part Two
Sky City Convention Centre Expansion a Money loser
Sky City Entertainment Group Ltd: Download full Company analysis
Sky City 2010 full year profit looking good
Long Term View: Sky City Entertainment Group Ltd
Sky City Entertainment: CEO Nigel Morrison discusses 2010 Half Year
Sky City Entertainment Group 2010 Interim Profit Review
Sky City to focus on Gaming
Sky City debts levels now more manageable
Insider Trading on Sky City shares
Sky City Profit Upgrade: Always on the Cards
Sky City's Current Cinema "Boom" a Horror Story in Disguise
Stock of the Week: Sky City Entertainment Group
Are Insiders selling Sky City Stock?
Sky City Entertainment 2009 Interim Result Preamble
2008 Sky City profit analysis
Sky City share offer confusing and unfair for smaller shareholders
Sky City Entertainment 2008 Full Year profit results , NZX release, 2008 full year presentation, result briefing webcast, financial statements
Sky City 2008 profit preamble
Sky City outlines a clear future plan
As recession bites Sky City bites back
Sky City Assets: Buy, sell and hold
Why did you buy that stock? [Sky City Entertainment]
Sky City Share Volumes set tongues wagging
Sky City half year exceptional on cost cutting
NZX Press release: Sky City profit to HY end Dec 2007
Sky City Cinemas no Blockbuster
Sky City Entertainment share price drop
New Broom set to sweep
Sky City Management: Blind, deaf and numb
Sky City sale could be off
Opposition to takeover
Premium for control
Sky City receives takeover bid
Sky City Casino Full Year Profit to June 30 2007
Setting the record straight
Sky City CEO resigns
Sky City Casino: Under performing
Sky City Casino 2007 HY Profit(analysis)
Sky City Casino 2007 HY Profit

Sky City Convention Centre @ Share Investor

Share Investor discusses Convention Centre proposal with CEO Nigel Morrison
Sky City Convention Centre Expansion a Money Loser: Part Two
Sky City Convention Centre Expansion a Money loser
SKC Convention Centre power-point slide illustrations & SKC submission to Auckland City Council

Discuss SKC @ Share Investor Forum

Download SKC Company Reports

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Buy The Intelligent Investor & more @ Fishpond.co.nz

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c Share Investor 2010

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