# Gamehost (GH on the TSE)



## PMREdmonton (Apr 6, 2009)

Have any of you ever looked into this company.

It used to be an income trust but converted into a corporation in 2010.

It primarily focuses on small inns (Will Inns) and casino operations in Canada.

They have a market cap of around 250M, they pay a dividend of about 7.5% and seem of have a free cash flow yield around 10% so the payout is 75% but looks sustainable for now.

The reason this stock has piqued my interest is there has been quite a bit of insider buying. Around 550, 000 shares or around 4% of company stock was acquired by insiders last year at close to the price this stock is trading for right now. They obviously consider this to be a good investment and there is quite good potential for growth due to population growth in Northern Alberta where there inns and casinos are mostly located (Ft. McMurray and Grade Prairie). When you mix 20 year old adults, six figure salaries and lack of family supervision I'm sure you see a bunch of kids buying drinks and gambling at the local casino.

They are far off the beaten path with no analysts following this company. 

They seem to have several things I like: growth just purely from demographics, minimal competition, sin industry, high dividend payouts that are well covered from CFO and insiders buying lots of shares. Lastly they are very illiquid with only a few thousand shares trading hands on a given day (illiquid stocks are known to have higher returns).

Does anyone have any thoughts on this one.


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## gibor365 (Apr 1, 2011)

I was watching this stock and even couple of months ago or I opened thread about this one (or asked CMF guys opinion in 'What are you buying?" thread). GH has extremely low beta = 0.12 and very good payout ratio for 7.5% yield, it's a pure dividend income play...

I was waiting for some pullback to low 11's, but it didn't happened and i bought something different. 
From time to time still looking at GH.
There are not too many reports fot GH...yes, I also noticed large insider buying ...
What scared me a little - very low volume...some days it was just several trades, so you can see all of then on TMX.com


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## ddkay (Nov 20, 2010)

This stock has history further than some charts can track it, did they rename from something else??










Previous highs around $16 made in 2007/08


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## gibor365 (Apr 1, 2011)

I think they used to be Gamehost Income Fund (GH.UN)


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## PMREdmonton (Apr 6, 2009)

Yes, the low buying is a cocnern for some people but there are studies that have shown that illiquid stocks routinely post better overall returns than more liquid stocks. This one is a simple business that has been around awhile in a sin industry with a focus on Northern Alberta. There don't seem to be too many concerns about how the company operates. The CEO took a salary of 558K last year which seems reasonable for a 250M company.

I am trying to buy some but will be patient due to large spreads on this one.


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## gibor365 (Apr 1, 2011)

Yes, for this one , because of the big spread , I think better to have buy limit... it frequently goes down to 11.50 area and then rebounds.... I also consider buying it at some point (before ex-div date)...

Those are cons in my opinion.
The gaming segment of GH includes mostly government-own slot machine, video terminals and lottery ticket outlets - so imho it should be pretty stable.
They located in Alberta and GH growth is indirectly driven by the oil sand exploitation... those workers have money , but not too much entertainment.
Sales Growth (1 year) 32.43
Sales Growth (5 year) 9.28
P/E < 15
Payout ratio about 40%, I checked also INK report-> big insider buying and no selling.
Beta extremely low 0.13, 52weeks range (high/low) is very small.


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## PMREdmonton (Apr 6, 2009)

Here is one firm that has a positive view on the company:

http://reports.pr-inside.com/sadif-analytics-upgraded-gamehost-inc-r3107650.htm

I think I'll put it a limit bid and wait.


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## gibor365 (Apr 1, 2011)

I had buy limits for GH beginning of the year, but it didn't trigger..... now I had a little bit cash available and other companies I was considering run up too fast, so maybe I'll try again to get GH ...


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## ddkay (Nov 20, 2010)

These fly under the radar illiquid stocks are funny, if you get them enough attention they will explode higher lol.


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## PMREdmonton (Apr 6, 2009)

That's what I'm hoping for.

What we really need is for Optsy Eagle to come by and give it his blessing - good results so far from PBN, PSD and ACQ. After seeing him get some of these under the radar Canadian small caps I began to realize that this is a sector of stocks that don't garner analyst attention so they can go unnoticed for a long time even if they are very profitable and have favorable futures.


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## doctrine (Sep 30, 2011)

I agree, although in my quick analysis of this company a few months ago it seems like there won't be huge growth, although it seems like a good way to collect a secure 7.5% dividend although you can't expect increases.


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## gibor365 (Apr 1, 2011)

I like insider buying numbers:
One Year Public Market Bias
Company Officers and Directors
Buying Selling
CEO $663,600 None
CFO $8,760 None
OFFICER $97,080 None
-----------------------
Total $769,440 $0
Net Buying $769,440

Regarding growth ...maybe you are right.... on other hand similat stock LIQ.TO with similar yield (also converted to corporation about the same time) was slowly declining about an year and than started flying (16% YTD).... who knows maybe GH will do the same


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## PMREdmonton (Apr 6, 2009)

A company like this may just expand by doing an addition to their casino if they can't comfortably accomodate all the gamblers up there in the North.

They also have potential to expand in their inn business.

The management seems very shareholder friendly and are major, major shareholders themselves.


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## doctrine (Sep 30, 2011)

LIQ appears to be increasing not because of revenues or profits, which are stable but not significantly growing - it looks to me like just a re-pricing of their stock to a higher P/E ratio, so perhaps a larger fund or company has been bidding up their shares in order to increase their stake. Not bad for a small investor owner of shares who is interested in selling, but it doesn't mean the company has higher earnings and means little to a long term investor.


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## gibor365 (Apr 1, 2011)

imho, LIQ is going up because their business/growth is stable , dividends look sustainable and pretty high, so many retail investors like such stocks and yes, maybe some pension funds were buying this stock... 
for 7.5% yield not many expect growth, just bying it for income...if you have a growth - it's a bonus 

Sure, if interest rates will go sharply up, it won't benefit such stocks.


P.S. Just checked ... ihuge spread bid 11.70, ask 11.79


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## Agrivar (Jun 15, 2010)

Was looking into GH a bit earlier in the year and spoke to TDW about whether they offered a synthetic DRIP but they do not and won't in the future as a result of low trading/high price swings. I ended up passing.


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## PMREdmonton (Apr 6, 2009)

Why not just bank the dividends and then buy when you want and feel you are getting a decent price.

You could just guy once a year to save on commission costs.


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## londoncalling (Sep 17, 2011)

ahh a timeless debate: to DRIP or not to DRIP that is the question. I choose not to drip for the reason stated above. I can also deploy the distribution/dividend money elsewhere if I so choose. For me this means I don't have to rebalance as often and my ACB fluctuates less often.

Edit: to add an additional comment I was watching GH about a year to 18 months ago. I found it interesting then and still do. I currently hold INN and LIQ so I don't need more hotels and booze. If I decide to trim or need to add to this type of stock for asset allocation I will be taking a closer look. Especially for all the reasons mentioned upthread. Shareholder friendly, potential for a continued Alberta boom, and insider buying. I personally know a lot of people employed at FT Mac. They love to make money but they love to spend it more. When they spend it they tend to spend it on "sins" like booze and gambling.


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## gibor365 (Apr 1, 2011)

I'm planning to buy it into RRSP and anyway I'm doing contributions several times per year, so no Dripping it's not the reason to skip stock..... maybe if you hold it in LIRA or TFSA and cannot contribute....


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## liquidfinance (Jan 28, 2011)

Results are on the website. 

I especially like this


> Furthermore, results for the Quarter are the best ever for the Company and the third consecutive quarter
> that we can repeat this phrase. That's a lot of good news in a sea of bad to be read almost daily in papers around the
> globe. Is it too good to last? No one can say for sure, but we don't know of a better region of the world we'd rather be.


http://www.gamehost.ca/documents/document/q2-12mda.pdf


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## liquidfinance (Jan 28, 2011)

Results out today. Seems another pleasing set. 

http://gamehost.ca/documents/document/GH md&a Q3 2012.pdf


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## liquidfinance (Jan 28, 2011)

Annual results for anyone interested

http://www.4-traders.com/GAMEHOST-I...UNCES-ANNUAL-2012-FINANCIAL-RESULTS-16535917/


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## cato (Jul 4, 2011)

I bought shares in 2011 @ $11.31 and have been collecting dividends since then. I was in Ft McMurray at the time and knew about their casino. Their casino business = oilsands activity. They have casinos in Grand Prairie, Fort McMurray and a hotel and casino in Calgary. They have not increased the dividend in approx 2 years and have concentrated on buying out the 50% of the Deerfoot Hotel and casino in Calgary that they did not own and expanding the casinos in Ft Mac and Grand Prairie and buying back shares. The biggest contribution in the future may be the Deerfoot Inn and Casino in Calgary.


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## nakedput (Jan 2, 2013)

cato said:


> I bought shares in 2011 @ $11.31 and have been collecting dividends since then. I was in Ft McMurray at the time and knew about their casino. Their casino business = oilsands activity. They have casinos in Grand Prairie, Fort McMurray and a hotel and casino in Calgary. They have not increased the dividend in approx 2 years and have concentrated on buying out the 50% of the Deerfoot Hotel and casino in Calgary that they did not own and expanding the casinos in Ft Mac and Grand Prairie and buying back shares. The biggest contribution in the future may be the Deerfoot Inn and Casino in Calgary.


Skimming through the most recent statement, they are situated perfectly in Quarry park where CNRL is making their home. I'm in Calgary and I have heard a lot of talk of companies moving towards the suburbs b/c they feel they can still take care of business out of the downtown core and save $$$ on costs. This can only bode well for them in the future. 

did they really just put LOL in a press statement or am I missing something?


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## gibor365 (Apr 1, 2011)

Today GH was down more than 4% on low volume and without any news ... Noticed too late, should've buy more... anyone buying?


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## liquidfinance (Jan 28, 2011)

Still priced too high for me to get back in.


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## gibor365 (Apr 1, 2011)

GH at 52 weeks low even though Q4 results released 2 weeks ago were pretty good... why? what is your opinion on this stock?


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## leeder (Jan 28, 2012)

Small cap company in which the business is mainly located in Alberta, specifically in Calgary, Fort McMurray and Grande Prairie. Payout ratio is close to 100% of earnings. I don't see much potential for capital appreciation. The outlook for this company is likely tied to Alberta's economy. That's probably why the stock price has dropped. If you have the patience for Alberta to turn around, the stock price may bounce back up. Otherwise, you're at least collecting a solid dividend, which seems sustainable for now.


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## gibor365 (Apr 1, 2011)

leeder, you are right .... and I was expecting much worse Q4 results... but result were pretty good... as I mentioned before, in bad times people drink (and play in casino) more


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## GoLong (Feb 21, 2015)

I barely follow this stock at all but the high fcf yield is intriguing. Any chances of some acquisitions given their low debt levels? May look into this a bit more later on.


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## gibor365 (Apr 1, 2011)

GoLong said:


> I barely follow this stock at all but the high fcf yield is intriguing. Any chances of some acquisitions given their low debt levels? May look into this a bit more later on.


Also Net Profit Margin is intriguing  Reasonable P/E... 

Gamehost:
* Says Boomtown Casino in Fort Mcmurray, Alberta is fully insured including property and business interruption coverage
* Says initiated insurance claim in anticipation of losses at Boomtown casino and is currently in discussions with insurer Source text for Eikon.

Any opinions if GH worth buying on weakness?


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## hollyhunter (Mar 10, 2016)

Stochastic Oscillator and RSI(14) are triggering a buy signal


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