Monday, July 9, 2007

Vegas Baby! Vegas!!

According to the most recent census bureau release North Las Vegas is the fastest growing city in the country. With continuous multibillion dollar resorts’ going up annually it is no surprise that Vegas tops the bureaus list. Investors have been gambling on the success of Las Vegas stocks for a very long time. Recently gaming stocks have been out performing the market due to strong earning and investor confidence. Should investors double down or walk away with a gain? It’s usually safe to bet on the house, but there are many variables that effect gaming stocks. Let’s take a closer look at a couple of the best gaming stocks sin city has to offer (WYNN & MGM):
Wynn (WYNN) resort and casino is currently the most expensive (2.7 billion) mega resort to be constructed in Vegas. If you are looking for a new Ferrari after hitting it big at the roulette table the Wynn has you covered. The Wynn differentiates itself from the other mega resorts by servicing exclusively to high end gamers and business travels. The Wynn is well equipped with an 18 hole golf course on site, Ferrari & Maserati dealership, high end shopping center, and numerous award winning restaurants. The Wynn does not have a gimmick or a theme like many of the large strip casinos. The Wynn is trying to attract a different type of demographic which obviously does not include families.

Wynn stock has been on a steady rise the past year hitting an all time high of $114 in February. With a p/e ratio of 14 and a profit margin of 39% the Wynn has strong financials. Being the new kid on the block should help the Wynn’s numbers for the next couple years until the next mega resort pops up.
Since the Hilton-Blackstone deal was announced this past week rumors have been flying about our next sin city stock, the MGM Mirage. Here is MGM’s profile provided by yahoo finance:

MGM Mirage, through its subsidiaries, engages in the ownership and operation of casino resorts in the United States. It offers gaming, hotel, dining, entertainment, retail, and other resort amenities. The company operates casino resorts under the names of Las Vegas Strip, Bellagio, MGM Grand Las Vegas, Mandalay Bay, The Mirage, Luxor, Treasure Island, New York-New York, Excalibur, Monte Carlo, and Circus Circus Las Vegas. It also operates other casino resorts under Circus Circus Reno, The Laughlin Properties, Railroad Pass, MGM Grand Detroit, Beau Rivage, Gold Strike-Tunica, Gold Strike- Jean, and Nevada Landing names. In addition, the company has 50% interest in Silver Legacy, Borgata, and Grand Victoria resorts. Further, MGM Mirage owns and operates golf course, Shadow Creek, Fallen Oak, and Primm Valley Golf Club. As of April 13, 2007, the company owned and operated 19 properties located in Nevada, Mississippi, and Michigan. It has strategic alliance with the Mashantucket Pequot Tribal Nation. MGM Mirage, formerly known as MGM Grand, Inc., was founded in 1986. The company is based in Las Vegas, Nevada. MGM Mirage is a subsidiary of Tracinda Corporation.

The MGM has looked strong the past year doubling since last October. Trading at a premium do to buyout speculation, MGM is an excellent gambling stock. Do you feel lucky?

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