| StockTradersPress.com |
| A
Corporate Communications Corp. Publication ---- All Rights
Reserved |
| Update |
June 15, 2004 |
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| UPDATE - STRONG
BUY |
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| Prime Hospitality Corp
(NYSE) PDQ |
$10.08 |
| 52-week range |
$5.89-11.90 |
| Market Cap |
$456.48M |
| Shares Outstanding |
44.97M |
| Book Value |
$15.12 |
| Price/Book |
0.67 |
| Average Daily Vol. |
230K |
| Target Price |
$13.00 |
| Target Percentage |
29% |
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| Prime
Hospitality Corp. is an owner and franchiser of 172
hotels. In addition, the company manages and operates 73 hotels
for third parties such as REITs. From a geographical perspective,
the majority of Prime Hospitality’s properties are located
in the Middle Atlantic, Southeastern and the Southwestern states.
The stock of Prime Hospitality Corp. has risen 14% since our
original recommendation in September 2003, which is somewhat
better than the overall stock market. |
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| We continue
to recommend Prime Hospitality Corp. for the following reasons: |
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- Prime Hospitality reported a first
quarter loss of $.06 per share, which was significantly
better then the comparable period in 2003, which showed
a loss of $.15 per share. Normally, the first quarter is
the weakest due to the seasonal slowdown in overall travel.
- As we had anticipated, the improving
economy is having a positive impact on the company. During
the first quarter, total revenues rose to $110 million (up
15% from the $98 million in 2003). More importantly the
company’s management has raised 2004 earnings guidance
due to the improved operating environment.
- From a financial viewpoint, Prime
Hospitality has a strong balance sheet. Its debt to total
capitalization is only 27%.
- We view the stock of Prime Hospitality
as a proxy for the improving economy. As the economy continues
to register gains, room occupancy and room rates will show
further increases, which the company has experienced over
the past two months.
- PDQ has a book value of
$15.12
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We
maintain our target price of $13.00 per share.
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