Cogan noted that cruise demand has been extremely strong largely because of new capacity with improving cruise product offerings, the industry s continued strong value proposition and increased brand awareness. Although the stocks have appreciated significantly over the past few years, Cogan believes that current conditions continue to provide significant opportunities for investors. Cogan made his comments at the 29th Annual Banc of America Securities Investment Conference, which runs through October 1 at the Ritz-Carlton Hotel in San Francisco. This former Montgomery Securities conference bears a new name but boasts a program that lives up to its impressive reputation. Industry is highly consolidated and there are huge barriers to entry ship yards are essentially full through 2002.
Companies have significant operating leverage and strong cash flow.
Industry has been largely unaffected by negative public relations about events such as oil dumping, cruise line fires, etc. Cogan believes the gaming sector is over its capacity hump and that many gaming stocks are poised to appreciate from current levels. However, these stocks are beating the odds, Cogan notes. Visitation has exceeded significant capacity growth in Las Vegas, allowing most companies to meet or exceed earnings expectations. Cogan suggests there are many near term catalysts that could propel gaming stocks and that it is better to be early to this party than late.