Minus Pool.com

Today’s top performing stock in the minus index was Nevada Gold and Casinos (UWN). The stock traded up 15% on three times it’s normal volume after the company announced that they had entered into an agreement to sell their 40% stake in American Racing and Entertainment LLC for three payments totalling $4.3 million. In March, the company also sold off their stake in Dry Creek casino for $8.1 million.

With a market cap of about $30 million today’s news was definetely material for the company and a welcome relief for shareholders, who have seen their market value drop from $10 to $2.50 over the last 12 months. With a very healthy balance sheet and access to more cash, it will be interesting to see what the company has planned for the cash. They have already indicated that they’ve earmarked the funds for growth, so I doubt we’d see a dividend or share buyback, but after a difficult year, it’s good to see the company begining to claw it’s way back. Whether this is the bottom of a difficult road or just a dead cat bounce remains to be seen, but at a fraction of what the company used to be worth, there may be a value opportunity for investors who aren’t afraid of risk or dabbling on the bulletin boards.

Nevada Gold develops and operates several casinos and helps to provides financing to tribal casinos. They also own mining rights to 9,000 acreas in Nevada. As of today’s close the company traded at just 1.8 times book and less then .50 times their trailing 12 month sales. Overall, their earnings look OK, but the company had a terrible 2nd quarter and on their Oct 2006 was forced to absorb steep losses after they spent $2.1 million to open up racing facilities for the subsidiary they just sold. At the same time, they also were forced to absorb losses related to $3.1 million in loans.