3 Casino Stocks Ready to Move

Investing in casino companies is one way to play any recovery in the world economy, as people begin to feel confident enough to go out and gamble again. In fact, each of the three companies highlighted today have a presence in one of the hottest gaming locations -- Macau. Gaming revenue in July surged 70% year over year, hinting that the long drought for casinos might actually have an end in sight.

Over at CAPS, our system for finding the best stocks through the collective opinions of more than 165,000 members, casino stocks have been especially popular. Here are three for you to consider, along with some relevant thoughts from the people investing in them:

Company

July Market Share in Macau

Recent Price

CAPS Rating (out of 5)

Las Vegas Sands (NYSE: LVS  )

20%

$31.18

**

Melco Crown Entertainment (Nasdaq: MPEL  )

15%

$4.38

****

MGM Mirage (NYSE: MGM  )

7%

$9.57

**

Source: Motley Fool CAPS and Bloomberg.

Las Vegas Sands ended the last quarter with more than $10 billion in debt and a bit more than $3.6 billion in cash. However, it has been working to remedy that situation by deleveraging. Last month, it announced that it would pay down $1 billion of that debt, and it extended the terms of a significant portion of the rest.

Several CAPS members like Las Vegas Sands' position in Asia. Member B1ll1am, for instance, writes: "This stock has most of it's assets outside of the USA in Asia. The Asian economys are going to recover faster than the USA and I think this stock will do very well."

Melco Crown is a favorite at our Global Gains newsletter. With early numbers out for August gambling results in Macau, Melco seems to have gained a bit more market share; it now reportedly stands between 16% and 18%.

CAPS member SlyMiah has laid out the investing thesis in this company pretty well:

Now that a majority of the infrastructure is in place, this stock will see increased revenue in the coming year. As this is realized, more people will flock to this stock. The low P/B and high revenue growth make it very attractive. The refinancing of debt, criticized as expensive, likely will be overcome by revenue growth. Finally, although there is always a risk of restrictive regulations from China, I see that country managing itself well through this economic slump, I see more and more consumers in the coming months coming from the mainland & Hong Kong.

Most of the CAPS commentary regarding MGM focuses on its Las Vegas properties and the trouble it's experiencing there. Until the U.S. recovery strengthens, expect more of the same there. But if you're looking for a possible value play, you might follow ValueDragonStyle and invest in MGM. It's sitting well off its 52-week high, but it's still a lot higher than it was during the depths of the bear market in early 2009.

You'll find more commentary on these and other casino companies over on CAPS. Come and join your fellow investors for some stock talk today.

Jim Mueller owns shares of Melco, but not of any other company mentioned. Melco Crown Entertainment is a Motley Fool Global Gains selection. The Fool's disclosure policy is no gamble.


Read/Post Comments (0) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1293866, ~/Articles/ArticleHandler.aspx, 9/23/2014 6:41:10 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement