Vail Resorts stock price climbs to 7-year high
AVON – Market forces pushed Vail Resorts stock to the highest price on Tuesday – $27.90 – in more than seven years. At market close on Thursday, the company’s stock finished slightly down from Tuesday’s mark at $27.38.The increase of the stock price comes in advance of next month’s release of what is expected to be a very rosy third-quarter earning report after a healthy ski season at the company’s five resorts. The company owns the Keystone, Breckenridge, Vail, Beaver Creek and Heavenly ski resorts.”Seventy-nine percent of this company is held by institutional investors and they know what’s going on,” said Fraser Horn of First and Main Investments in Edwards. “They’re not selling. There’s no stock to buy so it becomes simple supply and demand.”Investors holding the stock are probably looking to profit on the smoking hot real estate sales at the company’s four Colorado resorts and Heavenly on Lake Tahoe in California. At Vail alone, the company has more then $500 million in real estate development it will be selling over the next five years.In the last earnings report, company chief executive Adam Aron cheerily told stockholders and members of the press that much of that real estate can be sold at exceedingly profitable rates.The company has been positioning itself to be a player in the red-hot hotel sales and acquisition market. Earlier this month the company sold the 345-room Vail Marriott Mountain Resort for $62 million. It paid $49 million for the property four years ago and also invested heavily in a major remodeling. In January the company announced it has sold its 49 percent stake in the Ritz-Carlton, Bachelor Gulch. Earlier this month the company purchased full ownership of the Snake River Lodge in Jackson Hole, Wyo.The proceeds of the sale of the Marriott should further boost the company’s bottom line during what typically is the most profitable quarter of the year.At initial public offering Vail Resorts stock was selling for $22 a share. It hit an all-time high in 1998 of $32 a share, then plunged to a low of just under $11 a share following the Sept. 11 attacks. In the last year the stock has more than doubled in price.
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