Gambling stocks slip in October

Nov 3, 2009 2:38 AM
by GT Staff |

After three straight months of gains, the Applied Analysis Gaming Index of key industry stocks slipped in October by 2.36 index points.

The index is based on daily stock prices, which collectively slipped in October.

Of the seven casino operators and three slot machine makers tracked by Applied Analysis, only Pinnacle Entertainment (PNK), WMS Industries (WMS) and Bally Technologies (BYI) saw their stock prices increase.

Every other company had declines, albeit just single-digit declines.

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"Investors pulled back late in the month, leaving the majority of companies finishing lower than where they started," Applied Analysis principal Brian Gordon wrote in a report to clients Friday.

Even though the monthly index slipped a few points to close at 292.36, the index actually enjoyed its first year-over-year increase following 16 months of negative annual growth rates.

"On a company-by-company basis, all operators (other than MGM MIRAGE [MGM]) and equipment makers posted annual growth in stock price valuation," Gordon said.

Gordon added that the sluggish market movement in October was most influenced by third quarter earning reports, and to a lesser extent the increased liquidity for selective operators as well as caution on the part of investors.

"Based on company top-line revenues and earnings, it is clear the Southern Nevada market, for both destination resorts and locals casinos, remains more impacted than properties located in other parts of the country and world," Gordon said.

The biggest average daily price increase during the month was by slot machine maker WMS, whose stock price was up more than 8 percent.

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