Iao Kun Group Holding Company Ltd. (NASDAQ:IKGH)

CAPS Rating: 1 out of 5


Player Avatar kylehusky (20.96) Submitted: 7/7/2011 2:59:44 PM : Outperform Start Price: $6.77 IKGH Score: -132.95

I am very BULLISH on this stock base on my analysis:1. Share buyback program: The company is buying back 2 million shares. There are only 9 million shares trading on public float. 2. Good future earnings: for AERL, the expected 2011 net income guidance range to be raised towards when Q2 results are released in the coming early August. All analysts are expecting good results so stay tuned for that. 3.   You get a decent 4% dividend yield while you wait and that’s very attractive to me. Very strong cash position and awesome fundamentals. It’s sooooo freakin’ cheap compare to MPEL, LVS, WYNN, or even MGM. Even if AERL reaches $12 per share it is still trading below 50% discount to its peers at 6x EBITA. That’s the reason I didn’t suggest you to keep chasing MPEL because now it’s trading at around $13 and EBITA is around 15x. If you compare to its peers, the fair value of AERL is around $20. And at a technical standpoint, if you look at the chart, it has bottomed out at $5.5 and is currently at an uptrend movement with nice volume to support it. For protection I’ve put a stop loss at around $7 with a target selling price of $13, then I will sell 50% and have the rest to sit until it reaches around $20.This stock is an ultra strong buy as the casino revenue in Macau has already outperform Las Vegas, and it will continue to increase at a healthy rate.

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