A Hollywood Happy Ending?

When analyst Margo Vignola cut her 1993 earnings estimate for Hollywood Casino, many big investors bailed out of the stock. After all, she's with Salomon Brothers, the lead underwriter for the stock's torrid initial public offering on May 27 at 16 a share. The stock zoomed to 32 in just a week before burning out: It fell to 17 by early August. Then Vignola's downscaling in mid-October kicked the stock to 12.

Vignola likes the stock at this price, however. The company owns and operates the Sands Hotel & Casino in Atlantic City and has expanded into the riverboat gambling business in Aurora, Ill. She argues that the first riverboat, which opened in mid-June, was slow to gain steam and disappointed expectations. But "looking into 1994, Aurora should be a significant driver to earnings." She expects a loss of 30 to 35 in 1993 and earnings of $1.20 to $1.30 in 1994.