Sometimes, unloved stocks are good stocks that have just rubbed investors the wrong way, but actually represent great investment opportunities. Quite often, though, unloved stocks are unloved because there is something very wrong with either the stock or the company behind the stock.

In The Motley Fool's CAPS community stocks are rated on a scale of one to five stars based on the ratio of outperform and underperform ratings given to them by CAPS members. Stocks with the worst ratios end up with a one-star rating -- which is the CAPS' equivalent of a flashing red warning beacon.

One of the stocks that has landed that dreaded one-star rating is Wynn Resorts (NASDAQ:WYNN), which operates casinos in Las Vegas and Macau. The recession has absolutely hammered the Las Vegas Strip, leaving many casino operators gasping for air. In China, Macau has held up a bit better than Vegas, but suffice it to say that it's no picnic over there either. So no matter how you slice it, it's been a tough road for Wynn lately.

To get a better idea of why Wynn is so unloved, let's take a look at how it stacks up against comparable companies.


EBITDA Margin (Trailing 12 Months)

Debt-to-Equity Ratio

EBITDA Multiple (TTM)

CAPS Rating
(Out of 5)






Ameristar Casinos (NASDAQ:ASCA)





Boyd Gaming (NYSE:BYD)





Las Vegas Sands (NYSE:LVS)










Source: CAPS and Capital IQ, a division of Standard & Poor's. EBITDA = earnings before interest, taxes, depreciation, and amortization.

Based on the table above, it's obvious that CAPS members simply aren't keen on the gaming sector. With a one- or two-star rating on every major stock in the industry, the community seems to think that selling the entire group is the way to go.

To get more specific, let's take a look at why CAPS member ctbucs recently rated Wynn's stock an underperformer: "Vegas is about the party and throwing your excess money around. Until employment numbers pick up and housing rebounds Vegas is a no go."

While I tend to agree with the CAPS community more often than not, this is one place where I part ways. I've given Wynn's stock a thumbs-up in my CAPS portfolio, as I think it is the best-positioned of the major gaming companies. And while casinos will have more gray days ahead, I don't expect the lights of the Las Vegas Strip to disappear anytime soon.

Now I'm going to toss the ball in your court. So what will it be? Is Wynn a stock worthy of a rock-bottom rating? Or has the CAPS community overlooked the company's potential? Head over to CAPS and let the 135,000 community members know what you think.

And if it feels good to jab your thumb down on a stock, you may want to check out Las Vegas Sands and Bank of America (NYSE:BAC), both of which have been out of favor among Wynn bears.

Further Foolishness:

Ameristar Casinos is a Motley Fool Hidden Gems recommendation. Try any of our Foolish newsletter services free for 30 days. Let us educate, amuse, and enrich you. 

Fool contributor Matt Koppenheffer owns shares of Bank of America, but does not own shares of any of the other companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool. The Fool's disclosure policy plays marbles for keepsies.