Vail Resorts stock hits 7-year peak |

Vail Resorts stock hits 7-year peak

Cliff Thompson

AVON – Good snow and an unprecedented demand for real estate is helping drive the price of Vail Resorts’ stock to levels its hasn’t seen since 1998.The company’s stock was trading as high as $25.90 a share – a huge leap from the trading price of $13.73 a share last May. At market close Monday, the stock was selling for $25.79.The company’s stock at initial public offering in 1997 was $22 a share. A recession compounded by terrorism drove the stock below $11 a share after Sept. 11.The company restructured, slimmed staff, cut $45 million in expenses and refinanced its debt – saving $5 million annually in interest expense. All that helped propel it to the most profitable second quarter in its history. The company is reporting net income of $32.2 million on revenue of $264.6 million for its second quarter, which covers the beginning of the ski season. That’s a turnaround from the same period last year when it lost $6.7 million after a one-time refinancing charge.Chief executive Adam Aron has also hinted broadly that the hot hotel market could allow his company to sell some of its hotels for a huge profit. Last December the company sold its 49 percent stake in the Ritz Carlton Bachelor Gulch.See VR stock, page A10P/E and dividendsDespite the stock’s price surge, by some industry standards, it is overvalued for what it gives investors relative to its performance.The stock is carrying a price/earnings ratio approaching 34 or 35 – high by industry standards – meaning it is more speculative than, say, the Standard & Poor’s 500, which carries an average price earnings ratio of 20, said Richard Loth, an investment advisor and columnist for the Vail Daily.The reverse of the price/earnings shows the stock is providing investors with a return of 2.6 percent – about that of a no-risk, FDIC-insured certificate of deposit, Loth said.Vail Resorts has not paid a dividend since initial public offering in 1997.Staff Writer Cliff Thompson can be reached at 949-0555, ext. 450, or cthompson@vaildaily.comVail, Colorado

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