Vail Resorts, Inc. (NYSE:MTN)

Overvalued, highly seasonal company in both resorts and real estate.

The valuation is huge... and it's not even that good of a business.

I can't help it, I am a value investor. Valuation on this one is reaching 2008 highs, mediocre dividend for a company holding real estate, and sadly likely lots of retail sentiment on this stock by unsophisticated investors is driving the price this time of year. Good skiing, good resort, bad timing for this stock.

Inverse of Greenblatt Strategy utilizing CAPS screen weighted with ROE, GM, PE, and PB.

Climate change, a constrained consumer, and a low return business are significant challenges for this company.

I'm pulling for ski resorts long-term but the headwinds here are too strong.

Evaluating a screen. Feel free to ignore.

Still priced a little high; has some more to come down.

Big volume boost on Friday, positive move up. Should get to the 44 level.

Overvalued ski-resort: MTN

I've never liked this stock, but now especially I think it is way over valued.

I live in Breckenridge, and think I have an edge on knowing what is happening out on the slopes because I go riding almost every day. Just from my own perspective (and I have no actual data on this) this years skier numbers are WAY WAY down from years past. I have 17 days on my pass already, and I have yet to have to deal with lift lines anywhere near what I've seen in the past. Previously, over the Thanksgiving holiday, lift lines have been disgusting as there have been so many people out there. Last year I even got off the gondola one day (from town to the base of the resort), took a picture of the lift line, and then left, because I didn't want to wait in that line to get on the lift. This year, the pay parking lot at the base of the gondola hasn't even been close to full from what I've seen. Based on this, I think Vail Resorts is likely to report both disappointing Q2 (Their fiscal year ends Sept. 30th) and full year results.

Valuation wise, it is trading at an absurd 29 times trailing earnings, 27 times forward (2011) estimates, and 49 times 2010 estimates (which as mentioned, I believe those estimates are too high, and likely to disappoint the street). What is messed up is, on top of those valuations, the company is more expensive yet because they have $492 million in debt and just $69 million in cash, on their $1.4 billion market cap.

As of now there is less snow than I think I've ever seen on the mountain for this time of year. We have had snow, but most of it has just evaporated away already in the sublimation process. Even today, the run directly under the lower part of the Beaver Run Peak 9 chairlift has yet to be opened, and in all just 14 of 155 runs are open (http://www.breckenridge.com/mountain/terrain-status.aspx). The weather has just been bright warm sunny day after bright warm sunny day. Perfect for the riding I like going out and doing, but just awful for building up hype to have vacationers plan trips for. I really would imagine that if right now people are planning a ski trip over Christmas,Breck just wouldn't be the place you'd be looking at if you are basing the decision on where it has recently been snowing. The same goes for 3 oftheir other 4 resorts (Vail, Keystone, Beaver Creek), since they are all relatively close geographically. I think all of these resorts may have some severe problems opening a lot of terrain by the winter break unless some huge snowfalls happen within the next three weeks. And even in that case, it may be too late as people could be planningtheir ski trips elsewhere right now.

Today I both shorted the stock and bought put options. If you want to go the options route, I think the April 2010 $35 puts are a bargain for $2.40 (remember each option contract is for 100 shares).

RK

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.

Prime real estate selling at a discount

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.

Riding down the 12% pop.

Price multiples are too high.

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.

Finally an industry that values going down... Folks are going down in a big way. This will prop the stock p well into the warm weather season.

The dollar might be down, but those lift tickets sure aren't cheap! Plus, gas and food prices are way up, putting a crimp on people's vacation budgets. Revenue barely increased this year, and I don't see anything moving this stock until next year at the earliest. My money can be better utilized elsewhere.