Unlike competitors such as MGM Mirage (NYSE:MGM) and Harrah's (NYSE:HET), The Sands Regent (NASDAQ:SNDS) doesn't have a site in the Gulf Coast gaming industry, sparing the company from Hurricane Katrina's fury. While the Louisiana and Mississippi casino industry is picking up the pieces, The Sands continues to shift its efforts into integrating new acquisitions.

Fresh off the press, the company has announced the completion of an agreement to acquire Depot Casino and Red Hawk Sports Bar in the fast-growing city of Dayton, Nev. Because of its earlier purchase of Rail City Casino in Sparks, Nev., Sands' fiscal 2005 net sales and operating income were substantially higher. The latest buyouts in Dayton should give shareholders some optimism for the quarters ahead.

These acquisitions are critical for the company because its tourism-related business, specifically its Sands Regency Casino Hotel in Reno, Nev., continues to be threatened by the rapid expansion of the Native American casino industry. To counter this challenge, The Sands has increased its exposure in local markets. As it reported, Dayton's population grew 16.3% from 2000 to 2003, suggesting that The Sands will be increasingly relying on these growing local markets to fuel future growth.

Its latest quarterly figures point to the importance of its diversification strategy. The company's quarterly net revenues were weakened by its tourism-related units, which resulted in only 3% growth over the year-ago period. The Sands indicated that the lack of a major bowling event in Reno led to the tough quarter.

As the company continues to change gears, is its stock worth a look? An enterprise trading at 18 times its trailing-12-month earnings per share doesn't sound too enticing, given its growth challenges. However, investors should account for The Sands' property holdings, including the 6.3-acre Sands site and a majority of the Rail City location.

The Sands Regent's market shift partly explains why its stock has risen from the low single digits to its current $10 level. It's worth watching to see whether the company can continue to implement this strategy and increase shareholder value.

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Fool contributor Jeremy MacNealy does not own shares in any of the companies mentioned.