Casino Stocks On Sale...

Eldorado and Wynn look like buys

 

Wynn at these prices looks like a good takeover candidate for RW so they can merge the two properties. Big rumor around town is that RW needs a golf course for their higher end customers, and there just happens to be one across the street

 

Probably not given they amount of Wynn debt theyw ould have to assume

 

I bought a few thousand dollars worth of WYNN yesterday at around $85. Two years ago it was nearly $200, and as recently as a couple of months ago it was over $140. Hoping to make some big $$ when it comes back!

 

So far, it's working! Up $5 per share in just one day!

 

Caesars and Red Rock have screwed over share/debt holders in the past. It's really hard to trust management in this sector to do the right thing for their shareholders or customers.

I find it amusing Wynn and Sands (the latter by a meager $4) are the only companies with a share price higher than their respective daily resort fees.

 

Thirteen years of nominal to negative capital gain appreciation at a time the S&P 500 increased

Company - 3/1/2007 open vs. 3/11/2020 close
Excludes the two companies which went bankrupt since 2007 Red Rock (Bankrupt July 8, 2009) and Caesars (Banktrupt January 15, 2015); and Eldorado which was formed with via merger with MTR Gaming on September 19, 2014, and will not be a Vegas company until the pending Caesars purchase is complete, looks like a possible short opportunity.

MGM 44.00 vs. 9.49 78.4% Decline
Wynn 95.78 vs. 80.87 15.5% Decline
Sands 84.99 vs. 48.63 42.8% Decline
Boyd 46.07 vs. 18.56 59.7% Decline

SPY ETF 139.34 vs. 274.36 96.9% Increase

 

Good luck to all of you. The market is not at the bottom. The near and longer term effects of the present turmoil will be substantial. China/Macau is not a good near term bet., maybe not a good long term bet either. I agree with buying on a down market, but not these and not now.

I’m so glad retirement made me take fewer risks, reduce equities and enjoy looking at piles of cash.

 

I bought slot makers instead of casinos. As the casinos go bankrupt, merge, change ownership, whatever, someone will always take their place, and they all need the expensive video games and sports book software no matter what they're called or who owns them or whether they make or lose money. Not that they're immune, but felt like a better play to me.

 

If I were a stocks guy, I would be licking my chops for an even bigger drop in Wynn and MGM stock. Then buying....

MGM shielded itself with the sale...
Wynn gets the higher end players with more discretionary income....

Don’t take my advice, I’m just a craps guy...

 

Are you referring to the sale of land to the hedge funds? To me, their operating income is at far greater risk than the underlying real estate sold.

There may be a point were speculation into these shares make sense, like when Sands approached $4 and Sheldon scooped up shares to create a floor before the stock bounced back. However, this is not a great sector to invest on a long term basis. The problem is, individual shareholders have no control whether senior management will pull the plug and bankrupt the company for a reset after the enormous debt they added can no longer be serviced.

I believe low cost broad market index funds are best for most investors who do not want to follow anything business related. The couch potato portfolio is a good easy portfolio to invest (50% Stocks / 50% Bonds). I used a broader reach using the Smartest Portfolio You Will Ever Own, though I have under-performed the broad market past several years following this strategy, as Small/Mid Cap stocks have continued to under-perform when compared to owning the broad market (driven by the top tech companies). When I have previously considered individual stocks, I looked for quality long term dividends, a strong balance sheet with limited debt, and consistent earnings.

I'm 100% out of stocks after retiring last July, but I am looking to return into stocks as prices return to a more reasonable valuation. I liquidated based on the fact stocks appeared overvalued on near record PE levels, and felt there would be a large decrease over the next 18 months. I may be returning to the market later this week or soon, I'm waiting for the VIX to stabilize before making the jump. I did something similar in December 2008, and returned to the market in March 2009. You can't time this perfectly, but you can mitigate risk when market values are too high.

 

You $ cost avg on the way down from $85?

 

I’m glad you saw it for what it was....

 

This is a full blown market panic. Panics are not rational behavior and so a logical analysis based on facts and data is nearly impossible. Eventually there will be a bottom and some recovery, but a lot of damage will have been done and investor confidence will be eroded for a long time.

I’m 73 and nothing like this has occurred in my lifetime. My feeling is that if you were not all knowing and smart enough to get into cash before this happened, you’d be prudent not to join the crazed stampede over the cliff, nor am I encouraged that you should risk cash buying into a train wreck. Buy low, sure, but maybe wait for at least a small amount of stability and rational behavior?

 

I'm 70, had half my ira funds in Stocks , mutual funds and ETF's, and half in cd's . Those 2-3% cd returns look very attractive these days. I got lucky when I sold all my stocks and funds on 2/28. When this S#@T finally settles down I will be in with both feet.

 

I almost accidentally hit perfect market timing here. Mortgage renewal was coming up and i was debating the merits with myself of selling my TFSAs to discharge it vs not. Had I done that I'd have sold at basically the market high with an extra big chunk of monthly cash them coming in to buy back off the bottom.

Instead those investments will just be held long term, but instead I just get very good timing in securing a low rate on the renewal.

 

It is not just a panic, although there is an element of that.

And yeah, things will rebound eventually.

But a lot of things are going to be closing, a lot of people will be losing a lot of income, and a big recession is inevitable, which makes the stocks objectively less valuable than they were. Not to mention people who will need the cash to tide them over.

 

Boyd. 10.84.
what a penalty for a crappy players club travesty. It was 30+ in February.
it’ll be back. Not too many years ago it was around 7$ & change.

 

Might take a few years. Goes down way faster than it goes up or rebounds