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Gambling Stock Roundup: Macau Sales Rise Again in February, Nevada Thrives in January
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The last week was quite an eventful one for the gambling industry with Macau's gaming revenues rising for the seventh consecutive month and hitting a two-year high in February. This signals that the casino hub is firmly on its path to recovery from the slump triggered by China's anti-graft corruption drive and slow economic growth.
Meanwhile, the Nevada Gaming Control Board too announced an increase in revenues in the region in January.
In a separate development, Churchill Downs Inc. (CHDN - Free Report) posted mixed fourth-quarter 2016 results. Though earnings surpassed the Zacks Consensus Estimate, revenues missed the same.
1. Per the Macau Gaming Inspection and Coordination Bureau, gross gaming revenues for February rose 17.8% on a yearly basis to roughly $2.9 billion or 23 billion patacas.
The mere 3.1% rise in gambling revenues in January had raised concerns indicating that the recovery might not be that smooth for Macau. However, the strong revival in February has somewhat eased the fears. New resorts continue to attract tourists and leisure gamblers, giving a boost to revenues.
Notably, a tough operating environment in Macau weighed on the stock in 2015 and for the most part of 2016. The crackdown on corruption in China compelled Macau officials to impose restrictions on high rollers to stop billions of dollars from being siphoned off illegally from mainland China to Macau.
Consequently, this lowered footfall at local casinos. A slowdown in China, tighter visa policies, political unrest and a smoking ban on mass market gaming floors compounded the woes. In fact, the anti-graft corruption drive undertaken by the Chinese government is still keeping VIP gamblers somewhat at bay.
Nonetheless, efforts undertaken by Macau operators to revive revenues by wooing tourists and recreational gamblers with family-friendly resorts and more non-gaming facilities have started yielding results as evident from gambling revenue growth in the past seven months. Thus, it seems that the worst is over for Macau as the gambling industry is showing clear signs of stabilization.
2. According to the Nevada Gaming Control Board, Nevada gambling revenues increased 12% in Jan 2017 from the year-ago period to nearly $1.04 billion. This marked a turnaround from the slump witnessed in November and December. More specifically, casino revenues in the Las Vegas Strip – which account for more than half of Nevada’s total revenue – were up 14.4% year over year in the month. However, Reno recorded a 7.8% decline in casino revenues.
3. Churchill Downs posted fourth-quarter adjusted earnings per share of 68 cents that surpassed the Zacks Consensus Estimate of 57 cents by 19.3%. It also increased 58.1% year over year owing to an increase in revenues. Net revenue of $278.3 million missed the consensus mark by 1.8% but increased 2.2% year over year.
The upside reflects additional revenues from Big Fish Games, which this Zacks Rank #4 (Sell) company acquired in Dec 2014, as well as growth in revenues from TwinSpires and Racing segments, somewhat offset by drop in Casinos revenues.
The following table shows the price movement of the major gambling stocks over the past week and the last six months:
Company
Last Week
Last 6 Months
WYNN
5.8%
8.9%
LVS
1.8%
-1.6%
MGM
-0.04%
7.0%
MPEL
5.1%
19.3%
MCRI
6.4%
15.3%
CACQ
2.4%
22.1%
BYD
-0.7%
-0.4%
Over the last five trading sessions, share price movement of the major gambling stocks was mostly encouraging. Monarch Casino & Resort Inc. (MCRI - Free Report) gained the maximum at 6.4% followed by Wynn Resorts Ltd.’s (WYNN - Free Report) , which rose 5.8%. However, Boyd Gaming Corp. (BYD - Free Report) dipped 0.7%.
Moreover, over the last six months, the price performance of gambling stocks has been predominantly positive. Among the stocks that appreciated the most were Caesars Acquisition Company and Melco Crown Entertainment Ltd. that gained 22.1% and 19.3%, respectively. On the contrary, Las Vegas Sands Corp. (LVS - Free Report) recorded a decline of 1.6% over the same time frame.
What’s Next in the Gambling Space?
We note that gambling stocks have oscillated between gains and losses in recent sessions and investors can expect this volatility to continue in the coming days.
A Full-Blown Technological Breakthrough in the Making
Zacks’ Aggressive Growth Strategist Brian Bolan explores autonomous cars in our latest Special Report, Driverless Cars: Your Roadmap to Mega-Profits Today. In addition to who will be selling them and how the auto industry will be impacted, Brian reveals 8 stocks with tremendous gain potential to feed off this phenomenon. Click to see the stocks right now >>
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Gambling Stock Roundup: Macau Sales Rise Again in February, Nevada Thrives in January
The last week was quite an eventful one for the gambling industry with Macau's gaming revenues rising for the seventh consecutive month and hitting a two-year high in February. This signals that the casino hub is firmly on its path to recovery from the slump triggered by China's anti-graft corruption drive and slow economic growth.
Meanwhile, the Nevada Gaming Control Board too announced an increase in revenues in the region in January.
In a separate development, Churchill Downs Inc. (CHDN - Free Report) posted mixed fourth-quarter 2016 results. Though earnings surpassed the Zacks Consensus Estimate, revenues missed the same.
Gaming Industry 5YR % Return
Gaming Industry 5YR % Return
Recap of the Week’s Most Important Stories
1. Per the Macau Gaming Inspection and Coordination Bureau, gross gaming revenues for February rose 17.8% on a yearly basis to roughly $2.9 billion or 23 billion patacas.
The mere 3.1% rise in gambling revenues in January had raised concerns indicating that the recovery might not be that smooth for Macau. However, the strong revival in February has somewhat eased the fears. New resorts continue to attract tourists and leisure gamblers, giving a boost to revenues.
Notably, a tough operating environment in Macau weighed on the stock in 2015 and for the most part of 2016. The crackdown on corruption in China compelled Macau officials to impose restrictions on high rollers to stop billions of dollars from being siphoned off illegally from mainland China to Macau.
Consequently, this lowered footfall at local casinos. A slowdown in China, tighter visa policies, political unrest and a smoking ban on mass market gaming floors compounded the woes. In fact, the anti-graft corruption drive undertaken by the Chinese government is still keeping VIP gamblers somewhat at bay.
Nonetheless, efforts undertaken by Macau operators to revive revenues by wooing tourists and recreational gamblers with family-friendly resorts and more non-gaming facilities have started yielding results as evident from gambling revenue growth in the past seven months. Thus, it seems that the worst is over for Macau as the gambling industry is showing clear signs of stabilization.
2. According to the Nevada Gaming Control Board, Nevada gambling revenues increased 12% in Jan 2017 from the year-ago period to nearly $1.04 billion. This marked a turnaround from the slump witnessed in November and December. More specifically, casino revenues in the Las Vegas Strip – which account for more than half of Nevada’s total revenue – were up 14.4% year over year in the month. However, Reno recorded a 7.8% decline in casino revenues.
3. Churchill Downs posted fourth-quarter adjusted earnings per share of 68 cents that surpassed the Zacks Consensus Estimate of 57 cents by 19.3%. It also increased 58.1% year over year owing to an increase in revenues. Net revenue of $278.3 million missed the consensus mark by 1.8% but increased 2.2% year over year.
The upside reflects additional revenues from Big Fish Games, which this Zacks Rank #4 (Sell) company acquired in Dec 2014, as well as growth in revenues from TwinSpires and Racing segments, somewhat offset by drop in Casinos revenues.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Price Performance
The following table shows the price movement of the major gambling stocks over the past week and the last six months:
Company
Last Week
Last 6 Months
WYNN
5.8%
8.9%
LVS
1.8%
-1.6%
MGM
-0.04%
7.0%
MPEL
5.1%
19.3%
MCRI
6.4%
15.3%
CACQ
2.4%
22.1%
BYD
-0.7%
-0.4%
Over the last five trading sessions, share price movement of the major gambling stocks was mostly encouraging. Monarch Casino & Resort Inc. (MCRI - Free Report) gained the maximum at 6.4% followed by Wynn Resorts Ltd.’s (WYNN - Free Report) , which rose 5.8%. However, Boyd Gaming Corp. (BYD - Free Report) dipped 0.7%.
Moreover, over the last six months, the price performance of gambling stocks has been predominantly positive. Among the stocks that appreciated the most were Caesars Acquisition Company and Melco Crown Entertainment Ltd. that gained 22.1% and 19.3%, respectively. On the contrary, Las Vegas Sands Corp. (LVS - Free Report) recorded a decline of 1.6% over the same time frame.
What’s Next in the Gambling Space?
We note that gambling stocks have oscillated between gains and losses in recent sessions and investors can expect this volatility to continue in the coming days.
A Full-Blown Technological Breakthrough in the Making
Zacks’ Aggressive Growth Strategist Brian Bolan explores autonomous cars in our latest Special Report, Driverless Cars: Your Roadmap to Mega-Profits Today. In addition to who will be selling them and how the auto industry will be impacted, Brian reveals 8 stocks with tremendous gain potential to feed off this phenomenon. Click to see the stocks right now >>