Gambling stocks

[moo321]

I've seen the casino traffic increasing over the last 6 months in several different regions of the country. Gambling stocks are trading at very low levels, seemingly on the assumption that the casino biz is going to suck for years to come. I don't think this is the case.

Currently I'm looking at MGM, because of the City Center project, and the way their properties in other places are always the nicest, classiest place in town (see Gold Strike in Tunica, MGM Grand in Detroit, Beau Rivage in Biloxi). Also, they're trading at .5 times book. The only problem is all the debt.

Other options are Wynn, Sands, and Boyd.

Is MGM the best gaming stock? Is this the time to buy? How is casino traffic in your area?

[bjcount]

Originally Posted by moo321

I've seen the casino traffic increasing over the last 6 months in several different regions of the country. Gambling stocks are trading at very low levels, seemingly on the assumption that the casino biz is going to suck for years to come. I don't think this is the case.

Currently I'm looking at MGM, because of the City Center project, and the way their properties in other places are always the nicest, classiest place in town (see Gold Strike in Tunica, MGM Grand in Detroit, Beau Rivage in Biloxi). Also, they're trading at .5 times book. The only problem is all the debt.

Other options are Wynn, Sands, and Boyd.

Is MGM the best gaming stock? Is this the time to buy? How is casino traffic in your area?

Many of them were up 100%-300%+ a couple of weeks ago. After Bloomberg did a report on them last week they have been going down ever since. I'm in Boyd for a few bucks with a nice upward move.... should have bought more
.

From what I have read, Borgata in AC has been doing best of them all and they were looking to buy the Station casinos so I went with Boyd.
MGM is my next pick.

Take a look at some of the machine manufactures IGT, BYI ... they've been on a rocket the past few months.


BJC

[shadroch]

MGM stock has been very diluted due to them just issuing a couple million new shares. I'd stay away.
I've been buying NYNY, starting at about 60 cents a share. Bought some MNTR at $2 a share. I'm avoiding Vegas dependant stocks for now.

[ccl]

a few weeks ago i had some mgm stock i sold for about 6x what i paid for it, bought it when it went near $2 a share adn sold it around 12 a share.

there is money to be made in them depending on the timing.

ccl

[callipygian]

Stocks should rise as major uncertainty is made certain (e.g. completion of CityCenter & Cosmopolitan). I think investors will have to get used to different P/E ratios since those have been inflated for the past 10 years.

[moo321]

Originally Posted by callipygian

Stocks should rise as major uncertainty is made certain (e.g. completion of CityCenter & Cosmopolitan). I think investors will have to get used to different P/E ratios since those have been inflated for the past 10 years.

It's even been hard to nail down P/E because so many companies have had godawful quarters with negative earnings.

A lot of financial stocks have had to take massive write-downs as well, which makes it difficult to tell what their real value even is.

I've found it nearly impossible to guess forward P/E. Who knows if that company trading at 1-3 times P/E is gonna have their earnings collapse, or if that other company at negative earnings will quit having writedowns and be back at a good multiple.

I've been looking more at price-to-book and price-to-sales in this market.

[GeorgeD]

This mentions several casino stocks, and at teh bottom refers to a few other articles:

http://www.fool.com/investing/genera...-big-risk.aspx