At the Berkshire Hathaway
As if on cue, Lakes Entertainment
Our stock price hit a new high this quarter as we continue to implement our previously stated business strategies of eliminating risk, growing our assets and diversifying the company.
Here's the thing: It's not like the company missed an analyst estimate or something silly like that (though it's worth a mention that no analysts cover the company). But a poker player always looks for a reason to fold. And as I wrote myself in Companies on the Road to Ruin less than two years ago, a management that fixates on stock price is one of those reasons.
So, as a shareholder, I'm conflicted.
On one hand, Lyle Berman and Lakes have a solid track record of developing casinos. After all, this is much the same management that built Grand Casinos prior to Grand's Mississippi casinos merger with Caesars Entertainment
Lakes has four such development projects in the pipeline awaiting regulatory approval, the first of which should come online in 2005. Further, the company has a table games development business -- a business in which Shuffle Master
Lastly, the World Poker Tour itself is expected to be profitable this year.
On the flip side, Berman himself doesn't have a reputation for being shareholder-friendly. He has led management buyouts of his family's leather business -- now called Wilsons The LeatherExperts
Though Lakes is no longer a pure value play, I sincerely believe that there's a lot of upside to this company and its stock. But the more I think about it, the easier it becomes to back away from my Lakes Entertainment shares.
What do you think? Talk it over on the Gamblin' Fools discussion board.
Fool contributor Jeff Hwang owns shares of Berkshire Hathaway, Lakes Entertainment, and eBay.