Vail Resorts, Inc. (MTN)

Niche market, strong loyalty (increased season pass buyers last year in a severely depressed economy) and hell, the best damn terrain around.

Most families who make a skip trip have made a yearly ski trip for a long time and most of the customer base pertains to people not as crunched by the recession.

Winter is coming and this winter should be a good one for skiing. Now sure the market has already discounted for this, but when Vail and other ski resorts start to report their gains over last year in attendance there should be a good deal of excitement about this stock. Take the profits and get out though, not something i would consider for a long term investment.

Upthumb. Excellent cash flow. 10% 5 year growth rate. Low debt ratio. Low margins.

MTN has been oversold because it has real estate operations and because of the tough recession. But its worth more than $67 a share even if it grows earnings at 0% (using 11.5% discount rate DCF). That's a huge margin of safety coming off the worst financial months in living memory.

Nice cash cushion, I work on the beach and nobody's there compared to last year so they must be in the mountains. Serviceable debt.

Prime real estate selling at a discount

This economy will not be kind to travel or the ski industry.

Stopping to buy another third of this mile high asset. Yes, they are hurting in an economy like this but they have tightened things down and will pull through. Good value at these prices (but could go lower in the short term)---Outperform!

Here is what I thought of MTN about two years ago...

Time to go mountain climbing! Vail Resorts is an asset play with big, tall assets that will only appreciate and command higher prices than their stated book value. These areas are national treasures that will always be in demand year in and year out. Also a slight hedge against the falling dollar because of the attractiveness for foreigners to visit. Want to talk about moat? Keep your moat and I'll take a mountain. Vail is the big player in the some of the best Colorado ski resorts (Vail, Breckenridge, Keystone and Beaver Creek) which amounts to about 40% of the market. Also a resort in Lake Tahoe. The thesis on this one is pretty simple, is Colorado skiing, lodging and real estate likely to do well over time? Yeah, I thought the same thing too. When this solid company finally got down to a compelling price price due to recession fears and low early snowfall I decided it was time to get the MTN view. Want to join me at the top. Nice view up here and looking better, outperform!

The stock mirrors the S&P. What is the difference between it and an index fund? possibly a little more exposure without betting on the weather.

I own a vacation property there in addition to a stake in MTN because most indicators are pointing up; you just have to be patient.

I don't know for sure, but I think the last time some new mountains came on line was several hundred million years ago.

When I think of this company, I think of their moat. The mountains and their physical beauty provide an environment that cannot be easily replicated. Another kind of moat is the location. Lots of beautiful mountains are located in parts of the world that are very difficult to reach. A third kind of moat is provided by the "Vail" name. It is the Cadillac of mountains (okay, bad example).

On the down side, the same qualities that provide a moat may limit their growth possibilities. You can't add new locations as easily as a Starbucks. If they are going to grow, they will find ways to provide new services and amenities to their guests. Creative people can always find new ways to pamper fat cats.

They appear to be financially sound. They have maintained good cash flow in difficult times. Rich people will be back, and I hope they bring me with them!

Ski resorts in the present economy - sell.

Riding down the 12% pop.

Price multiples are too high.

morningstar screen

Some of the economics is built in to the current price, but they will miss earnings estimates by a huge number and the price will go a lot lower. Tourism forecast for this winter in Colorado is severly bad, and real estate development isn't any better. Picture the stock skiing off a cliff.

Jim Cramer pick to out perform. 3 Star rating w/ P/E Ratio of 20.49 following a significant drop in market the previous day. Price some what above 52 wk low w/ a range of 30.03-66.25. Currenly losing to the SPY by about 20% with a significant down turn. Trying to rate at a low point for long term returns. Look to re-evaluate at $38.00.

If I had money, I'd be getting INTO the market, not out, at this time.