Why Shares of Boyd Gaming Company Popped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our thesis.

What: Shares of Boyd Gaming Company (NYSE: BYD  ) were on a hot streak today, gaining as much as 12%, and finishing up 10% after updating its guidance last night.

So what: Ahead of its earnings report coming out shortly, the casino chain actually said it expects results to come in worse than its previous guidance. It now sees adjusted EBITDA from its Borgata property at $15 to $17 million, compared to previous guidance of $22 to $24 million, and it lowered its EPS guidance for the quarter to -$0.21 to -$0.27 from -$0.15 to -$0.20. CEO Keith Smith said, "Despite short-term challenges, we remain optimistic about the overall direction of the business."

Now what: The market's reaction to this news was bizarre. Almost always, shares sell off after lowered guidance, but this holiday season was a strange one. Retailers across the board announced terrible preliminary reports as consumers seemed to stay home and keep their money close. Casinos are a very cyclical business, so the market likely expected that attitude to carry over to Boyd, and thought the effects of the weak holiday season would be worse. Despite the market's reaction, I'd be wary of a company popping on a loss, and would also avoid a casino stock without access to hot properties in Macau or Singapore.

Safer than betting on black
One of the dirty secrets that few finance professionals will openly admit is the fact that dividend stocks, as a group, handily outperform their non-dividend paying brethren. The reasons for this are too numerous to list here, but you can rest assured that it's true. However, knowing this is only half the battle. The other half is identifying which dividend stocks, in particular, are the best. With this in mind, our top analysts put together a free list of nine high-yielding stocks that should be in every income investor's portfolio. To learn the identity of these stocks instantly and for free, all you have to do is click here now.


Read/Post Comments (1) | Recommend This Article (0)

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.

  • Report this Comment On January 31, 2014, at 7:13 PM, whyaduck1128 wrote:

    I don't know a thing about Macau and other foreign operations, and I haven't been to Atlantic City in years. I do know Las Vegas fairly well, though, and IMO Boyd's operations there, while not nearly as glamorous as those of MGM, LVS, CZR, and WYNN, are run well and presumably profitably. One thing I've noticed there is that they do tremendous business in marketing and supporting Asian and Pacific Islander players.

    whyaduck

    Long BYD--and LVS and WYNN

Add your comment.

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: 2819800, ~/Articles/ArticleHandler.aspx, 11/26/2014 4:05:49 AM

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