New Threads Only:  Add to Google Reader or Homepage
New Threads & Replies:  Add to Google Reader or Homepage
Forums are for serious investors only. GuruFocus Forum Rules.

Forum List » Guru News and Commentaries
Guru News, Stock picks and commentaries
New Topic
Goto Thread: PreviousNext
Goto: Forum ListMessage ListNew TopicLog In
Steven Cohen Buys Gaylord Entertainment as It Converts to REIT
Posted by: Holly LaFon (IP Logged)
Date: June 4, 2012 04:57PM

Steven Cohen, founder of SAC Capital Advisors, bought a position in a new holding, Gaylord Entertainment (GET), according to GuruFocus Real Time Picks. His purchase was of 2,508,358 shares at $38 a share on May 31, the same day the company announced it would sell some of its assets and reorganize as a Real Estate Investment Trust (REIT).

Gaylord Entertainment is a Nashville-based entertainment and hospitality company that owns brands such as Gaylord Hotels, the Grand Ole Opry, and many others. After a strategic review, the company decided to sell its Gaylord Hotels brand and the rights to manage its four hotel to Marriott International Inc. (MAR) for $210 million in cash before it converts to a REIT.

It will be the only lodging REIT focused primarily on group-oriented destination hotels in urban and resort markets.

“The REIT structure allows us to benefit from a more efficient tax structure, and establish a platform to grow our distinct asset base through organic growth of our existing portfolio and, in time, through strategic acquisitions,” Colin V. Reed, Gaylord chairman and CEO said in a statement. “Moreover, we believe that by working with Marriott International, our shareholders will benefit from significant property efficiencies and corporate overhead reductions, as well as revenue synergies which include Marriott’s ability to attract and market to large group customers. Based on our analysis to date, we anticipate annualized cost synergies, net of management fees, will total approximately $33 to $40 million. In addition, we believe we will have a unique competitive position in the hospitality REIT marketplace with a well capitalized balance sheet and a relatively predictable FFO (funds from operations) stream.”

By year-end, Gaylord will issue a special one-time dividend to shareholders of $415 to 450 million in undistributed earnings and profits, 80 percent of which will be in shares of common stock and 20 percent in cash.

The company also said as a result of the new developments it has changed its plans regarding the Aurora, Colo. hotel and convention center it announced last summer and planned to complete in early 2006. Now it is looking at a smaller-scale development with minimal financial commitment during the development phase.

Gaylord Entertainment has a P/E ratio of 82, P/S ratio of 1.9 and annual average earnings growth of 8.9 percent over the past 10 years.

GuruFocus Real Time Picks alerts you for the stock purchases and sales that Gurus have made within the last two days. Follow your favorite Gurus closely with GuruFocus' Premium Membership! If you are not a Premium Member, we invite you for a 7-Day Free Trial.

Guru Discussed: Steven Cohen: Current Portfolio, Stock Picks
Stocks Discussed: GET, MAR,
Rate this post:

Rating: 3.1/5 (8 votes)

Sorry, only registered users may post in this forum.

Please Login if you have an account or Create a Free Account if you don't
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)