RHP - Embedded Expectations Analysis - 2021 02 09
Ryman Hospitality Properties, Inc. (RHP:USA) currently trades at a premium relative to UAFRS-based (Uniform) assets, with a 1.8x Uniform P/B. At these levels, the market has expectations for profitability to remain near historical highs, but management may have concerns about hotel operating losses, their cancellation fee collection, and their cash reservesSpecifically, management may lack confidence in their ability to mitigate hotel operating losses and sustain average daily rate (ADR) growth. Moreover, management may be concerned about the sustainability of increased cancellation fee collection and elevated rebooking rates, and they may also be exaggerating the performance of their programming slate. In addition, management may be concerned about their maintenance capex exceeding their Furniture, Fittings, and Equipment (FF&E) reserves, the available capacity on their revolving credit facility, and their dwindling cash reserves
Ryman Hospitality Properties is a real estate investment trust that is focused on group-oriented, destination hotel assets in urban and resort markets. The company's business segments include Hospitality and Entertainment. The Hospitality segment includes the Gaylord Hotels branded hotels, the Inn at Opryland and the AC Hotel, as well as the company's equity investment in Gaylord Rockies Resort & Convention Center. The Entertainment segment includes the Grand Ole Opry, the Ryman Auditorium, WSM-AM, Ole Red, the General Jackson, the Wildhorse Saloon, and Gaylord Springs, among others.
In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:
- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
We sought to provide investors and company analysts with a source of information that changed all that.
Many years later, our business model remains because little has changed on Wall Street.
- Corporate credit ratings remain years behind the fundamental underpinnings of company performance
- Stock analysts continue to make recommendations with deeply inherent biases
- Research firms have failed to break down the walls between credit, equity, and macroeconomic research
- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
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