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Bear Stearns Analyst: Gaming, Lodging & Leisure Industries Trends Will Lag the Economy

5 March 2001

NEW YORK--(Press Release)--March 5, 2001-- At the recent 9th Annual Louis Rukeyser Investor's Conference held at the MGM Grand in Las Vegas, Bear Stearns senior managing director Jason Ader addressed an audience of more than 10,000 investors and industry leaders regarding the challenges facing the gaming, lodging & leisure industries over the next six to 12 months.

According to Ader, the gaming industry is experiencing a slowdown in rate of revenue growth. Although Las Vegas remains healthy, he notes that current trends could change quickly. ``March and April will be a real test given the difficult comparisons versus last year,'' said Ader. Companies Ader believes are poised to maintain strong earnings include MGM Mirage (NYSE: MGG) and International Game Technology (NYSE: IGT). Ader also pointed out that the stability of cash flow in the industry, and the fact that bonds are fully priced, makes gaming debt a safe haven in the high yield market.

As for the hotel industry, Ader believes it will likely lag the S&P 500 over the next six to 12 months. However, Ader notes that lodging stocks seem well positioned to rebound in 2002. ``There is limited supply growth for hotels - eventually these stocks are going to turn around,'' said Ader. One stock Ader recommends watching is Starwood Lodging (NYSE: HOT).

Ader also discussed the similar slump facing the cruise industry. ``Bookings have been slow for the last few weeks, and overbuilding will continue to pressure industry returns,'' said Ader. Despite low expectations, Ader believes that these stocks are fairly priced. In contrast, Ader said motorsports will likely see improved viewership and on-track attendance over the next 12 to 18 months. Ader predicts that NASCAR will become increasingly popular as the sport spreads to larger metropolitan areas. A favored name in this sector is International Speedway

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