She may not be Santa Claus, but Virginia McDowell has provided solid leadership through difficult times. Her company, Isle of Capri has performed well, bringing a higher stock price, increased earnings and EBIDTA, and clearly understands its core customer.

Yes, Santa Claus, there is a Virginia.

Her full name is Virginia McDowell. And, while you’ve been resting up at the North Pole after your December labors, Ms. McDowell and her crew have been steadily delivering gifts to Isle of Capri shareholders.

ISLE stock is over $19 a share as of this writing, and has risen throughout the year from the $8.37 that ended 2014, and is triple its 52-week low of $6.25.

In another comparison, the stock has more than doubled from the $9.63 on the day McDowell was appointed CEO in January 2011.

Last Tuesday, the stock jumped 16 percent as ISLE closed out its fiscal year with a fourth quarter that far exceeded expectations—with an adjusted earnings per share of 58 cents vs. analyst consensus forecast of 41 cents.

Most impressive is that the big improvement in earnings is not coming from some special event—no major new property, no comparison to a previous year weather disaster.

The improvement resulted from blocking and tackling—lower costs, reducing debt and interest expense, a more targeted marketing program, and nice revenue growth at the company’s biggest markets, such as Black Hawk, Colorado, and Pompano, Florida.

All the while, McDowell says, there remains a focus on the customer experience that has both driven revenue growth and gained market share. Those customers, she said, are voting with their wallets.

Also impressive is that ISLE is achieving double-digit revenue growth at properties that, in another context, could be said to range from Wal-Mart to Sears in quality, and definitely not Tiffany’s or Bergdorf Goodman.

In other words, the McDowell team knows its customers and manages the company well.

ISLE is also benefitting from the revival of America’s casino industry after years of under performing following the Great Recession.

As casino executives have long promised, their lower cost structures mean a higher percentage of revenue flowing through to the bottom line as growth has resumed.

Of course, what goes up can go down, and a big hit to the economy can bring another big hit to casinos, too.

But short of a deep recession, casinos appear ready for a somewhat sustained period of growth.

Those Millennials who gaming suppliers fret so much about aren’t abandoning casinos. They are social creatures, and nothing is more social than the table game pit. There’s a reason more casinos are replacing slot machines with table games, reversing the long-time pattern, and it isn’t just a tax rate differential in VLT states, though that certainly affects the calculus.

So where does that leave ISLE? Shares are valued at somewhere between seven to eight times next fiscal year’s forecasted EBITDA. Thus, ISLE no longer is a bargain, but is also not expensive.

In fact, with continued improvement, ISLE could lift that EBITDA, thus stock price, beyond current expectations.

On the company’s fourth quarter conference call, McDowell and CFO Eric Hausler mentioned several areas of further cost reductions, such as more debt refinancing and software acquisitions that will reduce operating expenses.

They sounded like practical answers provided by a team that has a track record of implementation.

It has been generally thought that the controlling Goldstein family wanted to sell ISLE. Now, with the stock price and valuation up, that might be both more difficult to do and less appealing.

But it also means a sale would fetch an ever high price than today.

So, Santa, get the elves back to the work benches, and take a look at Isle of Capri.

Articles by Author: Frank Fantini

Frank Fantini is principal at Fantini Advisors, investors and consultants with a focus on gaming.