Top 10 Casino Companies To Buy Right Now


In the following video, Fool contributor Matt Thalman discusses which casino operator he thinks will benefit the most from a stronger Las Vegas economy.

While Las Vegas Sands (NYSE: LVS  ) and Wynn Resorts (NASDAQ: WYNN  ) are both major players in Macau, MGM Resorts (NYSE: MGM  ) is making a big push to grow its base in the Chinese gambling mecca, while it also has a massive footprint in Las Vegas, and the other two have a much lower room count. MGM owns a good portion of the Las Vegas Strip, and as we continue to see average daily hotel room rates rise for the city and increased gaming revenue for the strip, we will see MGM greatly benefit from a recovering American tourist industry and a stronger Las Vegas.


In addition, while Las Vegas Sands and Wynn have the big head starts in Macau, MGM will experience massive revenue and profit increases when it begins opening more properties in that location, while LVS and Wynn will only experience the organic, and slower, profit growth.

Top 10 Casino Companies To Buy Right Now: (XTRN)

Las Vegas Railway Express Inc. focuses to re-establish a conventional passenger train service between the Las Vegas and Los Angeles metropolitan areas. It plans to establish a ?Vegas-style? passenger train service. The company is based in Las Vegas, Nevada.

Top 10 Casino Companies To Buy Right Now: Wynn Resorts Limited(WYNN)


Wynn Resorts, Limited, together with its subsidiaries, engages in the development, ownership, and operation of destination casino resorts. The company owns and operates Wynn Las Vegas casino resort in Las Vegas, which includes approximately 22 food and beverage outlets comprising 5 dining restaurants; 2 nightclubs; 1 spa and salon; 1 Ferrari and Maserati automobile dealership; wedding chapels; an 18-hole golf course; meeting space; and foot retail promenade featuring boutiques. Wynn Las Vegas casino resort also features approximately 147 table games, 1 baccarat salon, private VIP gaming rooms, 1 poker room, 1,842 slot machines, and 1 race and sports book. It also owns and operates an Encore at Wynn Las Vegas resort, a destination casino resort located adjacent to Wynn Las Vegas that features a 2,034 all-suite hotel, as well as a casino with 95 table games, 1 sky casino, 1 baccarat salon, private VIP gaming rooms, and 778 slot machines. In addition, the company operates Wyn n Macau casino resort located in the Macau Special Administrative Region of the People?s Republic of China. Wynn Macau casino resort features approximately 595 hotel rooms and suites, 410 table games, 935 slot machines, 1 poker room, 1 sky casino, 6 restaurants, 1 spa and salon, lounges, meeting facilities, and retail space featuring boutiques. Further, it operates Encore at Wynn Macau resort located adjacent to Wynn Macau. Encore at Wynn Macau resort features approximately 410 luxury suites and 4 villas, as well as casino gaming space, including a sky casino consisting of 60 table games and 80 slot machines, 2 restaurants, 1 luxury spa, and retail space. The company was founded in 2002 and is based in Las Vegas, Nevada.


Advisors’ Opinion:

  • [By Jeanine Poggi]

    Wynn Resorts'(WYNN) run up of more than 55% this year has caused Wall Street to question its valuation.

    Currently, eight analysts have a buy rating on Wynn, 16 say hold, two rate it underperform rating and one says to sell the stock.

    "With little on the growth horizon in the intermediate term, new competition from Cotai coming in 2011 and 2012 … and the unclear timing of a true recovery in Las Vegas, we see few catalysts not yet priced-in to pull valuation higher than current levels," Bain wrote in a note following its third-quarter earnings report.


    During the quarter, Wynn lost $33.5 million, or 27 cents a share, compared with a profit of $34.2 million, or 28 cents, in the year-ago period. The loss was attributed to charges related to servicing its debt. On an adjusted basis, Wynn actually earned 39 cents, matching Wall Street’s outlook.

    Total Revenue grew to $1 billion from $773.1 million, better than the $990.8 million analysts pr edicted.

    In Macau, Wynn reported a 50% surge in revenue to $671.4 million, while EBITDA was $198 million, up 54.5% from $128.2 million in the third quarter of 2009. Earlier in the year the company opened its $600 million Wynn Encore Macau, which added 414 rooms to the market.


    Looking ahead, Wynn expects to break ground on its Cotai development in early 2011. The $2 billion to $3 billion project is slated to open in 2015, and management said it would provide additional details following its fourth-quarter earnings report.

    In Las Vegas, CEO Steve Wynn says the Strip is on the road to recovery. "I believe we have seen the bottom in Las Vegas," he said during the company’s third-quarter conference call. "I don’t know how fast it is going to get better but it isn’t going to get any worse."


    Las Vegas revenue inched up 3.1% to $334.5 million during the three-month period, and EBITDA grew 9.3% to $76.5 million.

    Wynn also issued a cash dividend of $8 a share payable on Dec. 7 to sharehold! ers of record on Nov. 23.

  • [By Roberto Pedone]

    One gambling player that’s starting to move within range of triggering a near-term breakout trade is Wynn Resorts (WYNN), a developer, owner and operator of destination casino resorts. This stock has been trending hot so far in 2013, with shares up 24%.


    If you look at the chart for Wynn Resorts, you’ll notice that this stock has been uptrending strong for the last two months, with shares moving higher from its low of $120.96 to its intraday high of $140.82 a share. During that uptrend, shares of WYNN have been consistently making higher lows and higher highs, which is bullish technical price action. Shares of WYNN have been consolidating for the last few weeks, moving between just below $137 to just above $140 a share. A high-volume move above the upper-end of its recent sideways trading chart pattern could trigger a big breakout trade for shares of WYNN.


    Traders should now look for long-biased trades in WYNN if it manages to break out above some near-term overhead resistance at $140.82 to its 52-week high at $144.99 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 1.30 million shares. If that breakout triggers soon, then WYNN will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $160 to $165 a share, or even $170 a share.


    Traders can look to buy WYNN off any weakness to anticipate that breakout and simply use a stop that sits right below its 50-day moving average of $132.51 a share. One can also buy WYNN off strength once it takes out those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Best Low Price Stocks To Watch Right Now: Boyd Gaming Corporation(BYD)

Boyd Gaming Corporation, together with its subsidiaries, operates as a multi-jurisdictional gaming company in the United States. As of December 31, 2011, the company owned and operated 1,042,787 square feet of casino space, containing approximately 25,973 slot machines, 655 table games, and 11,418 hotel rooms. It also owned and operated 16 gaming entertainment properties located in Nevada, Illinois, Louisiana, Mississippi, Indiana, and New Jersey. In addition, the company owns and operates a pari-mutuel jai-alai facility located in Dania Beach, Florida, as well as a travel agency in Hawaii. Further, it holds a 50% controlling interest in the limited liability company that operates Borgata Hotel Casino and Spa in Atlantic City, New Jersey. Boyd Gaming Corporation was founded in 1988 and is headquartered in Las Vegas, Nevada.


Advisors’ Opinion:

  • [By Hesler]

    Boyd Gaming(BYD) posted a bigger-than-expected drop in its second-quarter earnings, citing weak performance in Las Vegas, the Midwest and the South.

    During the quarter, the casino operator earned $3.4 million, or 4 cents a share, a 73% plunge from $12.8 million, or 15 cents, in the year-ago period. Adjusted earnings came in at 5 cents a share, significantly lower than the 10 cents Wall Street predicted for Boyd.

    Boyd’s revenue fell 6% to $578.4 million, also short of the consensus of $588 million.


    "The lingering effects of the recession have left consumers unusually sensitive to shifts in the economy, and they now react more quickly to economic data and other developments, such as fluctuations in the stock market," said CEO Keith Smith, in a statement. "Although conditions remain uncertain, we believe long-term stabilizing trends are still in place, and that year-over-year growth is achievable by the end of 2010."

    In the Las Vegas locals market, the rate of decline in earnings before interest, taxes, depreciation and amortization rose to 16.2% from 10.8%, J.P. Morgan analyst Joseph Greff wrote in a note. Boyd previously reported a 9.9% decline for its Borgata property in Atlantic City. Revenue came in at $186.9 million, a 2.4% decrease from the year-ago period.


    "We think second-quarter results are less important than the coming operating results in the second-half of 2010, when the Atlantic City market faces increased regional competitive pressures from tables in Pennsylvania and West Virginia and the first Philadelphia casino opens this summer," J.P. Morgan analyst Joseph Greff wrote in a note.

    Greff reaffirmed his underweight rating on Boyd, given increasing competition in Atlantic City, a weak recovery in the Las Vegas locals market and stagnant regional gaming trends.

    While there is no doubt the Atlantic City gaming market remains one of the most depressed, Bor gata continues to dominate the market and gain share. Atlant! ic City saw gaming revenues plunge 11.1% in June to $286.8 million. Boyd co-owns Borgata with MGM Resorts, which is currently in the process of divesting its 50% stake.

Top 10 Casino Companies To Buy Right Now: Pinnacle Entertainment Inc.(PNK)


Pinnacle Entertainment, Inc. owns, develops, and operates casinos, and related hospitality and entertainment facilities in the United States. It operates casinos, such as L’Auberge du Lac in Lake Charles, Louisiana; River City Casino and Lumiere Place in St. Louis, Missouri; Boomtown New Orleans in New Orleans, Louisiana; Belterra Casino Resort in Vevay, Indiana; Boomtown Bossier City in Bossier City, Louisiana; and Boomtown Reno in Reno, Nevada. The company also operates River Downs racetrack in southeast Cincinnati, Ohio. As of May 26, 2011, it operated seven casinos and one racetrack. The company was formerly known as Hollywood Park, Inc. and changed its name to Pinnacle Entertainment, Inc. in February 2000. Pinnacle Entertainment, Inc. was founded in 1935 and is based in Las Vegas, Nevada.


Advisors’ Opinion:

  • [By Jeanine Poggi]

    Pinnacle Entertainment(PNK) was the great transition story of 2010, with shares spiking about 45% this year.

    The regional casino operator’s most impressive story has been in its gross margins, as management, under the leadership of new CEO Anthony Sanfilippo, is in the process of increasing the company’s operating efficiencies and prudently allocating capital. Analysts believe Pinnacle is in the early stages of this process, and will continue to drive revenue growth.


    In its third quarter, Pinnacle reported a surprise profit of 10 cents a share on an adjusted basis, better than consensus estimates of a loss of 7 cents. Revenue grew 15% to $287.8 million, while property-level margins reached 23.4%, also ahead of forecasts.

    Last month, Pinnacle purchased Cincinnati’s River Downs Racetrack for $45 million. The deal includes 155 acres, 35 of which are still undeveloped. The transaction is expected to close by the end of the first quarter of 2011.

    Thi s deal could generate significant returns in the event that Ohio decides to legalize video lottery terminals at racetracks, Santarelli said.


    Pinnacle is also in the process of looking for a buyer of its oceanfront land in Atlantic City, where it originally intended to build a $1.5 billion casino, before squelching plans. The casino operator bought the land in 2006 for $270 million from groups affiliated with Carl Icahn and later added another piece of land for $70 million.

    While the land’s currently value is $38 million, Pinnacle insists it will not sell it on the cheap, holding out for the best deal.

    Pinnacle currently has $228 million in cash and $375 million of availability under its revolver.

Top 10 Casino Companies To Buy Right Now: MGM Resorts International(MGM)


MGM Resorts International, through its subsidiaries, primarily owns and operates casino resorts in the United States. The company?s resorts offer gaming, hotel, dining, entertainment, retail, and other resort amenities. It also owns and operates golf courses and a golf club. As of December 31, 2010, the company owned and operated 15 properties located in Nevada, Mississippi, and Michigan; and has 50% investments in 4 other casino resorts in Nevada, Illinois, and Macau. In addition, MGM Resorts International has an agreement with the Mashantucket Pequot Tribal Nation, which owns and operates a casino resort in Connecticut, to carry the ?MGM Grand? brand name. The company was formerly known as MGM MIRAGE and changed its name to MGM Resorts International in June 2010. MGM Resorts International was founded in 1986 and is based in Las Vegas, Nevada.


Advisors’ Opinion:

  • [By Hawkinvest]

    MGM Resorts International (MGM) is one of the world’s largest hotel and casino companies, based in Las Vegas. Since December, MGM shares have been trading in a range of about $9, to almost $15 per share. The stock is now at the upper limit of the recent trading range which means that the risk of holding or buying this stock right now, could be elevated. MGM shares have rallied with the markets but appear extended and vulnerable to a sell-off. The company has a heavy debt load and it has been reporting losses. The balance sheet has about $13.45 billion in debt and only about $1.97 billion in cash. MGM could be impacted by higher oil prices because many consumers could cut back on spending if they go to Las Vegas, and some might decide not to go at all, and instead opt for a "staycation." With MGM facing challenges and the shares near recent highs, it could make sen se to sell now and buy on dips later this year.


    Here are some key points for MGM:

    Cu rrent share price: $14.18

    The 52 week range is $7.40 to $16.05

    Earnings estimates for 2011: a loss of 53 cents per share

    Earnings estimates for 2012: a loss of 39 cents per share

    Annual dividend: none

Top 10 Casino Companies To Buy Right Now: Penn National Gaming Inc.(PENN)

Penn National Gaming, Inc. and its subsidiaries own and manage gaming and pari-mutuel properties in the United States. It operates approximately 27,000 gaming machines; 500 table games; and 2,000 hotel rooms in 23 facilities in 16 jurisdictions, including Colorado, Florida, Illinois, Indiana, Iowa, Louisiana, Maine, Maryland, Mississippi, Missouri, New Jersey, New Mexico, Ohio, Pennsylvania, West Virginia, and Ontario. The company was formerly known as PNRC Corp. and changed its name to Penn National Gaming, Inc. in 1994. Penn National Gaming, Inc. was founded in 1982 and is based in Wyomissing, Pennsylvania.

Advisors’ Opinion:

  • [By Quickel]

    Penn National Gaming(PENN) squeaked past its guidance through improved cost controls, and investors praised its efforts.

    But expectations were low, and its upbeat outlook shouldn’t be viewed as a message that regional markets are recovering. "Going forward, we project soft regional gaming revenue results over the next three to six months, as we do not expect to see a significant increase in consumer spending patterns given the uncertain economic environment," J.P. Morgan analyst Joseph Greff wrote in a note.

    Penn National raised its full-year earnings guidance to $1.18 from $1.13 a share, and up its revenue outlook by $26 million to $2.44 billion from $2.41 billion.

    During the second quarter, the company earned $9.2 million, or 9 cents a share, compared with $28.5 million, or 27 cents, in the year-ago period. Excluding items, Penn actually earned 29 cents a share, a penny higher than estimates.

    Revenue rose 3% to $598.3 million, higher than the $597.1 million Wall Street projected. The upside was driven by both better revenues and margins and was generally broad-based across many properties, especially larger venues in Charlestown, Lawrenceburg and Grantville, Pa.

    Penn National rolled out table games in West Virginia and Pennsylvania during the quarter, which should be a growth catalyst moving forward. The company also plans to open a slot facility in Maryland on Sept. 30 and expects its Toldeo, Ohio, location to open in the first-half of 2012. Its Columbus project is slated to open in the second-half of 2012.

    The company repurchased 409,000 shares during the quarter. "[This] sends a message to investors on the value of its equity, but perhaps indicating the lack of near-term acquisition opportunities," J.P. Morgan analyst Joseph Greff wrote in a note.