...And Casinos On The River

Many gaming stocks have been on a losing streak, even as the stock market rockets to new highs. An exception is Players International (PLAY), operator of two riverboat casinos: in Metropolis, Ill., and Lake Charles, La. Players' shares have nearly doubled--from 11 in mid-December to 22 on June 6 (adjusted for a split).

What's the deal? Bulls on Players cite its growth prospects, healthy balance sheet, strong earnings, and robust cash flow, which have enabled the company to finance its own expansion.

One more boost: Players is being eyeballed, say some pros, by a couple of major entertainment-and-gaming companies. Players' "strong cash flow and financial condition makes it an attractive acquisition target," says Joseph Coccimiglio, an analyst at Dean Witter Reynolds. He figures a fair takeover price is 31-32.

One takeover pro believes that an investor group led by entertainer Merv Griffin, which already owns 16% of Players, is a potential suitor. Another live one: Promus Cos., which has formed a joint venture with Players on a $200 million casino complex in Maryland Heights, Mo., on the Missouri River west of St. Louis.

Even without the takeover element, Players is deemed to be way undervalued. David Anders of Raymond James & Associates says the stock is "extremely attractive." He sees Players making $1.61 a share this year and $2 in 1996. Revenues, which totaled $223.6 million last year, should hit $283 million in 1995 and $402 million next year.

Players' future is pegged on the company's addition of a land-based casino in Mesquite, Nev., by July, and two more riverboats.

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