Casino stocks lost big last month as weak earnings and new gambling restrictions in Macao drove investors away from the highly cyclical sector. But the future may not be as bleak as many investors fear, which means casinos could be building towards a big payout.
Shares of both Wynn Resorts Ltd. (Nasdaq: WYNN) and MGM Mirage (NYSE: MGM) are down more than 20% this month, while Las Vegas Sands Corp. (NYSE: LVS) stock has tumbled 15%.
"Casino stocks were so badly beaten during the crisis last year, they were probably only second to banking stocks," Lawrence Ho, who owns Macao's City of Dreams casino, told MarketWatch. "They were so beaten that even after the run they've had this year they're nowhere near the valuations they were at in 2007 or early 2008."
[…] for instance: It's easily accessible to about 60 million people in the Guangdong province and burgeoning Macau, but it drew just 5.2 million people in its first fiscal year, 2005-2006 – short of […]