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The Newsroom - 2010 |
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January jolt for gaming stocks
Average daily price rises for seven of 10 companies on index
January 30, 2010 - Gaming
stocks started off the year with a bounce as investors anticipated
fourth-quarter earnings and casino watchers tried to gauge the impact of the
recently opened CityCenter on Las Vegas.
On a whole, seven of the 10 publicly traded casino operators and slot machine
manufacturers charted by Las Vegas-based financial consultant Applied Analysis
saw an increase in their average daily stock price during January compared with
December.
MGM Mirage had the largest increase, almost 15 percent. Wall Street analysts
upgraded their views of the company in light of the December opening of its $8.5
billion CityCenter, which includes Aria, the project's 4,004-room hotel-casino
centerpiece.
On Thursday, MGM Mirage Chairman and Chief Executive Officer Jim Murren told the
Preview 2010 audience that Bellagio -- the hotel-casino analysts feared would be
hurt by Aria -- continues to improve its year-over-year performance.
"Cannibalization concerns in Las Vegas persist, but there are some signals the
higher-end of the market is weathering the economic storm better, particularly
as the public markets have reported relatively strong rises off the bottom,"
Applied Analysis principal Brian Gordon told the company's clients Friday.
The Applied Analysis Gaming Index rose 12 points in January to close at 298.23.
Most of the major casino operators, including MGM Mirage, Las Vegas Sands Corp.
and Wynn Resorts Ltd., are expected to report fourth-quarter earnings in
February.
"(The) earnings season will provide additional insight on recent performances
and increased visibility on the sector," Gordon said.
The biggest decline among the companies charted by Applied Analysis belonged to
regional casino operator Pinnacle Entertainment, which had its average daily
stock price fall almost 12 percent in January.
The Las Vegas-based company went through a management shake-up in November and
changed CEOs. The company also scaled back plans for a casino expansion in Lake
Charles, La.
Last week, Missouri gaming regulators moved to revoke the casino license for
Pinnacle's President Casino in downtown St. Louis, one of two casinos the
company now operates in the market.
In January, the three major slot machine manufacturers, International Game
Technology, Bally Technologies and WMS Industries, all saw their average daily
stock prices increase compared with December.
The three companies also posted quarterly earnings with varying degrees of
success in the challenging three-month October-to-December period.
Goldman Sachs gaming analyst Steven Kent told investors Bally's and IGT's
results were largely driven by cost savings and both companies seemed to suggest
that replacement sales seem to be coming in slower than expected.
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Average Daily Stock Price |
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Company |
Dec. 2009 |
Jan. 2010 |
% Change |
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MGM Mirage |
$9.98 |
$11.46 |
14.83 |
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Las Vegas Sands Corp. |
$15.56 |
$17.44 |
12.08 |
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Wynn Resorts Ltd. |
$61.93 |
$66.55 |
7.46 |
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Boyd Gaming Corp. |
$8.50 |
$8.44 |
-0.71 |
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Penn National Gaming |
$27.51 |
$28.65 |
-4.14 |
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Pinnacle Entertainment |
$9.91 |
$8.73 |
-11.91 |
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Ameristar Casinos |
$16.58 |
$15.08 |
-9.05 |
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Int'l Game
Technology |
$18.79 |
$19.67 |
4.68 |
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WMS Industries |
$39.32 |
$41.87 |
6.49 |
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Bally Technologies |
$41.56 |
$43.84 |
5.49 |
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SOURCE: Applied Analysis |
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