Economists expressed different views on whether Fed Chairman Ben Bernanke was about to slow the amount of money he was injecting into the economy through the purchases of treasury bills and mortgage-backed securities but investors seemed to leave no doubt as to their opinion.
Just as they had during the previous week, the major stock indices on Monday continued to tank. And with them, went the shares of gaming companies, especially those with ties to Macau, where Chinese gamblers have established world wagering records.
During the trading session on Monday morning, Wynn Resorts Ltd. (WYNN) saw its shares fall to $122.37. Just a week earlier, the shares were trading at $138.43.
Shares of Las Vegas Sands Corp. (LVS) fell to $47.95 while MGM Resorts International (MGM) shares dipped to $12.87.
Yet, the majority of analysts appearing on cable financial networks said they were advising their clients to take advantage of the dips that were creating a buying opportunity.
That same attitude was expressed by highly-respected gaming analyst Harry Curtis of Nomura Securities. He and his associates, Louise Cheung and Brian Dobson, noted that “Thus far, the stocks have declined but gaming volumes (in Macau) have not.”
They admitted that there was a notable pullback in Macau last week but that it was offset by strong gaming volumes during the first half of the month of June.
The analysts recommended that investors should “buy Wynn Resorts or Las Vega Sands if they drop another 5% or 10%.”
David Bain of Sterne Agee also saw the pullbacks as a buying opportunity but warned that “the exception being a significant China economic slowdown beyond most recent macro indicators.”
He was referring to recent news stories suggesting that banks in China have been experiencing a credit crunch and that there may be a significant slowdown in the Chinese economy.
Ray Poirier is the longtime executive editor at GamingToday.
Contact Ray at [email protected].