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 investing thesis.
What: Gaming stocks jumped today, led by Caesars Entertainment (NASDAQ: CZR ) rising 28% and Boyd Gaming (NYSE: BYD ) jumping as much as 11%
So what: First, the Las Vegas Strip reported a 13% increase in gaming revenue during December�, which was very bullish for Caesars and MGM Resorts (NYSE: MGM ) . The bigger driver was New Jersey Governor Chris Christie's statement that he was willing to allow a 10-year trial period of online gambling in Atlantic City.
Now what: The Las Vegas data is good, and that will help Caesars, but I think the reaction to online gaming right now is overdone. Atlantic City online gaming won't have a serious impact on Caesars' results, and there's no indication that this is pushing the federal government to allow online gaming. Caesars, Boyd, and MGM would be three of the big winners if this was the start of an online gaming revolution, but that's not what we're seeing today. At best it's a baby step in a marathon for the industry.
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More Expert Advice from The Motley Fool
When MGM Resorts began constructing the CityCenter in Las Vegas, it was an audacious plan that seemed like a sure bet with its prime location in the center of The Strip. But Las Vegas hit a rough patch during the Great Recession and has yet to fully recover, so MGM has since turned its attention to a new market in Macau. This Chinese gaming enclave now holds the key to the company's future, and a new resort on Cotai may relieve the company from crushing debt. For expert analysis on whether this former high-flying stock can regain its form on the back of a growing presence in Asia, you're invited to check out The Motley Fool's new premium report on MGM Resorts. As an added bonus, you'll receive a full year of key updates and guidance as news develops, so don't miss out - simply click here now to claim your copy today.
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