Dover Downs is a gaming and entertainment complex in Delaware.  What makes this investment unique is a simple understanding of their operations and assets.  They own and operate a race track, simulcasting, 165,000 sqft casino of a range of slot machines, a 500 room hotel, 11 suite spa, dining, conference center, and entertainment venue.

Take a minute and piece all those assets together, I am talking about the concrete, steel, construction costs and equipment; now judge that value to the $116 Million Dollar market cap.  Feels like it is priced right, or a value pick.  However in this economy an asset can be a pit for taxes if the property doesn’t have a foundation of earnings.  DDE has a nine year history of making money earning $.36 a share in 2009 in the face of an increased tax rate which reduced earnings at about $.19 a share.  The new tax hit the bottom line in 2009, but so did the economy.

Most gaming competitors are taking large losses as people are gambling less and traveling less.  This is the case for DDE, but to a smaller degree when compared to the competitors.  In a gaming recovery, DDE could be poised with positive numbers and a steady foundation for a quality jump in share price.

Growth is a unique barrier, today I believe there is enough potential in a recovery to not worry about growth, but the State of Delaware recently approved legislation to allow table gambling or games such as black jack, and roulette.  This could offer a fun and new experience for guests as the complex showcases what is new in Delaware.

In general DDE is a new position because it is a loser stock (down 60% over the past 5 years, but has a steady foundation) and it offers an easy to understand and study investment in a the gaming market, which adds to diversity.  Price @ $3.66