Red Rock (RRR, Financial), a Las Vegas “locals” casino company, increased 14.2% in the quarter and contributed 27 basis points to the Fund’s performance. Red Rock’s earnings growth across its properties remained steady in the quarter, as the company continued to achieve EBITDA significantly above pre-COVID-19 levels. The Las Vegas locals market is benefiting from new higher income customers who are staying longer and spending more. The closure of some non-gaming amenities, a reduction in the workforce, and more targeted marketing has also helped increase margins and cash flow. This, combined with completing the sale of the Palms, improved the company’s balance sheet and increased its cash flow.
From Ron Baron (Trades, Portfolio)'s Baron Focused Growth Fund fourth-quarter 2021 letter.
