Intertain Group (TSE:IT), the Canadian gaming, lodging and restaurants combine, which has seen returns to investors plummet by 45% in a year, set out its stalls with analysts on Wednesday prompting broker Mackie to recommend a 'buy' on the stock.
Mackie said the company expects to announce a response to the December short seller report on Feb 8, followed by details on the revamped Management Incentive Plan in a few weeks.
But Mackie said "We remain focused on the underlying business and the large disconnect between IT’s stock price and the business’s cash generation capability, which appears as strong as ever. Options discussed yesterday included listing/relisting IT on another venue, spinning out certain assets etc. We believe it is still too early to speculate what these options might be and how they might eventually play out."
IT trades at 7.5-8 times 2016 EV/EBITDA and 7 times 2016 price/earnings ratio (including Gamesys earnout). Peers trade at an average 14 times 2016 EV/EBITDA and 22 times 2016 P/E.
Intertain's shares were last seen trading up 1.1% at C$9.09. Mackie did not publish a target price.
Meanwhile, Mackie also said Crius Energy Trust (TSE:KWH.UN) is benefiting from recent gains in the US dollar and increased its 12-month target price to C$13 per unit from C$12.
Mackie said it still rates Crius Energy Trust a 'buy' and said Crius continues to be undervalued by comparison with its peers.