Red Lion Hotels

9 1/2% Capital Trust Preferred

Stock

Yahoo Ticker     RLH-PA

Recent Price  $23.65


Current Yield  10.2%

Quarterly Dividend .5938

Next Dividend Payment Date 3/31/2010

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Description

Red Lion Hotels Corporation operates as a hospitality and leisure company in the United States. It
engages in the ownership, operation, and franchising of mid-scale and upscale, and full service hotels
under the Red Lion name. The company also offers entertainment services, such as event ticketing,
and the promotion and presentation of various entertainment productions. As of December 31, 2008,
its hotel system contained 47 hotels, of which 19 were wholly-owned, 13 were leased, and 15 were
franchised, located in 9 states and 1 Canadian province, with approximately 8,910 rooms. It was
formerly known as WestCoast Hospitality Corporation and changed its name to Red Lion Hotels
Corporation in September 2005. The company was founded in 1937 and is based in Spokane,
Washington.


Commentary


Red Lion Hotels is a rather small chain of hotels primarily located in the Northwest United States.  While many
lodging chains have been losing money during the recession Red Lion has remained modestly profitable.  While
the profits have been just modestly profitable they have good positive cash flows.

It should be noted that Red Lion just let their CEO go, with no good explanation.  The new CEO claimed it was not
for performance reasons--you can read the story
here.

Red Lion will  be reporting earnings for the 4th quarter of 2009 on 2/16--it will be interesting to see if the business
is holding up well.  For anyone considering buying the preferred security it may be wise to wait for the earnings
announcement---a modest report will not drive the security up----but any downside surprise could drive the price
down.

This security is very thinly traded so limit orders must be used as the spreads on the bid/ask can be
large.

We will add some of this security to both our Blended Model as well as our High Yield Portfolio in the
next few days


This is not a recommendation to buy any security---but is only meant to point out potential opportunities which may
or may not fit an individuals investment needs.


The companies website is
here and should be visited by those considering purchasing this security.

The companies latest 10-Q filing is
here.
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