Industry Insider by Ray Poirier | All it took was for the price of gasoline to fall a few pennies for Wall Street to once again see the value that the recently-hammered Las Vegas gaming stocks had to offer.
Investors flocked to such names as Wynn Resorts Ltd. (WYNN), MGM MIRAGE Inc. (MGM), and Las Vegas Sands (LVS) on Monday.
By the time Monday’s busy trading day ended, WYNN shares had gained $7.07 to close at $114.67. MGM moved up $3.08 to $36.52 while LVS was higher by $2.71 to $53.66.
These prices contrasted strongly with the numbers just a month ago. On July 14, WYNN was at $77.29, MGM had fallen to $23.68 and LVS closed at $33.55 per share.
Why even lethargic Churchill Downs Inc. (CHDN), not often viewed as a gaming stock, got a boost Monday from analysts at Brean Murray Securities, pushing the company’s lightly-traded shares up by $3.77 to $41.63.
In a recent commentary, an associate portfolio manager with Gabelli Global Multimedia Trust said that today’s rates offered the third-best buying opportunity in recent history for gaming stocks, behind the 1987 stock market crash and the 1991 start of the Gulf War.
One observer suggested these moves are probably just the beginning. "These companies came forward with all their bad news during the recent earnings period and with the price of oil falling they again are becoming more attractive."
The announcement by Boyd Gaming Corp. (BYD) that the Echelon project on the site of the former Stardust Hotel/Casino would be suspended for a year or so triggered the beginning of the gaming stock rally. And recent announcements out of Macau showing an increase of more than 40% in July gaming revenues have added to the momentum.
Reportedly, the recent Macau breakdown showed Las Vegas Sands increasing its market share while Stanley Ho’s 18 casinos saw lower visitor counts.
That may change during the Beijing Olympics. Macau Slots, a subsidiary of Ho’s Sociedade de Jogos de Macau, has begun offering fixed-odds betting on Olympic events. This is the only legal betting on the Olympics in China.
Helen Poon, marketing manager for Macau Slots, said that bets as low as $1.30 each began rolling in through a website and various betting centers in Macau as soon as the Olympics events began.
"We are Chinese and we have to support the games," Poon explained. "It’s more fun to watch the games while you place bets…it’s more exciting."
The smallest odds are being offered on the U.S. basketball team that features big-name stars of the NBA. In women’s basketball, the two favorites are the teams from the U.S. and Australia.
Olympic events wagering has been banned in Nevada.