6425 JP

Universal Entertainment Corp.

Consumer


Presented:03/05/2018
Price:¥5,880.00
Cap:$3.88B
Current Price:¥1,368.00
Cap:$0.89B

Presented

Date03/05/2018
Price¥5,880.00
Market Cap$3.88B
Ent Value$3.83B
P/E RatioN/A
Book Value¥2,934.64
Div Yield1.34%
Shares O/S78.89M
Ave Daily Vol280,064
Short IntN/A

Current

Price¥1,368.00
Market Cap$0.89B
Universal Entertainment Corp. engages in developing, manufacturing and sale of gaming machines. It operates through the following business segments: The Pachislot and Pachinko and Others. The Pachislot and Pachinko segment involves the manufacture of completed products, the development, sale and rental of pachislot and pachinko machines, the manufacture and sale of peripheral equipment and in the procurement of units consisting of parts and materials. The Others segment involves broadcasting business, and casino and resorts operations. The company was founded by Kazuo Okada on December 2, 1969 and is headquartered in Tokyo, Japan.

Publicly traded companies mentioned herein: Universal Entertainment Corp (6425 JP), Wynn Resorts Ltd (WYNN)

Highlights

The unique history of the relationship between Kazuo Okada and Steve and Elaine Wynn has been well covered in the press since 2010 - 2012; however, recent events have led the presenter to establish a long position in Japanese pachinko maker Universal Entertainment (6425 JP). The stock is up ~40% year-to-date, with most of the gains coming after Steve Wynn’s early February resignation. In the presenter’s opinion, the odds have shifted and it now appears likely that Okada’s 20% stake in Wynn Resorts (WYNN), which is held by Universal and was forced to be redeemed at a 30% discount to the market price, could be worth substantially more than the $1.8B it is being carried at. With a market cap of 481.2B JPY (~$4.5B), there could be 50%+ upside for Universal shareholders in 2018 if the case (Wynn Resorts Ltd. v. Okada, A-12-656710-B, Clark County, Nevada District Court) is either settled before the April 16 trial date, or if Okada wins outright.

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Idea Discussion

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