Wynn Resorts, Las Vegas Sands, and MGM Resorts are all having an incredible trading session today, and for good reason. Data released today with regard to China’s Macau district proved to be overwhelmingly positive. This news will likely equate to strong revenue for casinos. Today, we’ll talk about the news, how the market reacted to the news, and what we can expect to see from WYNN, LVS, and MGM ahead. So, let’s get right to it…
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WYNN, LVS, and MGM Get A Boost From Macau Data
The Macau District in China has been a big concern for Wynn Resorts, Las Vegas Sands, and MGM Resorts. Unfortunately, the district has been seeing declines in traffic, leading to declines in revenue since May of 2014. However, today’s news was overwhelmingly positive. For the first time since May of 2014, we’re finally seeing growth in China’s gaming region.
According to the data that was released today, gross gaming revenue in the Macau district rose by 1.1% to $2.4 billion in the month of August. Not only did this prove to be the first month of growth in quite some time, it also blew analyst expectations away. During the month, analysts expected that the district would see a decline in revenue in the amount of 1.5%.
While this was overwhelmingly positive news at the moment for WYNN, LVS, and MGM, Wynn Resorts has the most to gain. After all, the company recently spent $4 billion building the Wynn Macau Resort in the southern Chinese territory. In a recent note, Union Gaming had the following to offer:
“Leading up to the end of the month, we believe GGR was trending slightly down based on our on-the-ground observations. Obviously that changed during the final days of the month resulting in a positive finish…”
How The Market Reacted To The News
As investors, one of the first things that we learn is that the news moves the market. Any time there is positive news released with regard to a publicly-traded company, we can expect to see gains in the value of the stock. In this particular case, the news that was released wasn’t only positive for one company, it was positive for every casino-related company in the Macau district. As a result, we’re seeing gains across the board. Currently (2:46), WYNN, LVS, and MGM are trading at $93.92, $53.81, and $24.75 per share after gains of $4.60 (5.15%), $3.60 (7.17%), and $0.86 (3.60%), respectively.
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What We Can Expect To See Moving Forward
Moving forward, I have a relatively bullish opinion of what we can expect to see from WYNN, LVS, and MGM. At the end of the day, things are finally moving forward in a positive direction for casino stocks. Economic conditions around the world are starting to improve, and consumers are spending more. As a result, we’re naturally seeing more movement in the gaming industry. All in all, I’m excited for what we can expect to see from these stocks ahead.
[Image Courtesy of Wikipedia]