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September 13, 2004 Stock Pick: Trump Hotels & Casino Resorts, Inc. (DJTC)

Stock Price: $0.40

Trump Hotels & Casino Resorts, Inc. owns and operates casinos and hotels in the Atlantic City and Great Lakes area. Donald Trump currently owns 55% of the company.

This is an extremely risky short-term play. The company is currently undergoing reorganization/recapitalization to emerge from bankruptcy. Under the most recent proposed plan, equity shareholders will be wiped out, while Trump will still own 25% and relinquish his title as CEO.

In the short-term we do not believe DJTC will remain at $12 million market capitalization. Even under bankruptcy the firm deserves to be valued more than $12 million.

If a new plan is released to give shareholders a cut in the reorganized company, we expect the stock to jump huge. Once again, this is an extremely risky short-term play. The stock has jumped to over $0.60 once since bankruptcy. However, It may be best to wait for the stock to fall a bit more.

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