Dane Capital sees a strong long-term growth for Playa Hotels & Resorts NV (PLYA), a $1.7-billion market cap operator of hotels and resorts. In its Q4 investor letter, Dane Capital discussed its investment thesis on Playa Hotels and Resorts and other companies – we’ve already covered Yatra Online, Limbach Holdings, and AgroFresh Solutions. In this article, we’ll take a look at the fund’s comments on Playa.
Dane Capital said the following in the letter:
We’ve owned both Playa common and warrants and sold much of our position near its highs. That said, we still believe they have an exceptional management team and believe the longer-term roll-up story. When shares broke below $10 we added to our position. We also owned warrants at $0.60, which were exchanged to stock for the equivalent of $1.01 (or $10.10 for 10 warrant – at the time they were at $0.78). In aggregate, we made over 50% on our position in 2017. We maintain a small position and are looking to be opportunistic to add to our position since we believe the long-term story is intact. Although we were troubled by the Jamaica resort running behind plan (we believe they will successfully address the issues), and at the end of the day, we like low multiple stocks. We see a strong long-term growth runway for Playa.
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Playa Hotels & Resorts NV owns and operates resorts in prime beachfront locations in popular vacation destinations in Mexico and the Caribbean. The company’s portfolio includes 13 resorts in Mexico, the Dominican Republic and Jamaica. It owns and manages Hyatt Zilara Cancun, Hyatt Ziva Cancun, Hyatt Zilara and Hyatt Ziva Rose Hall Jamaica, Hyatt Ziva Puerto Vallarta and Hyatt Ziva Los Cabos, as well as three resorts under Playa’s brands, The Royal and Panama Jack Resorts. Additionally, the company operates Sanctuary Cap Cana in the Dominican Republic and owns five resorts in Mexico and the Dominican Republic that are managed by a third party.
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