Gaming stock index jumps in April


The major publicly traded casino operators and slot machine manufacturers closed out an upbeat April.

Eight of the 10 companies followed by Las Vegas-based financial consultant Applied Analysis for the company's Gaming Index showed increases in their average daily stock prices. The results helped the index jump more than nine points in the month.

Quarterly earnings reports that began in April gave investors some positive signs. Wynn Resorts Ltd., for example, told shareholders results from the company's Macau operations jumped 46 percent in the quarter, while Las Vegas, which had been a drag on earnings, was up 24 percent.

In April, shares of Wynn, traded on the Nasdaq National Market, were up almost 12 percent on an average daily basis.

"Despite somewhat mixed performances in April, expectations for gaming operators that have yet to release earnings remain high," Applied Analysis principal Brian Gordon wrote in a report to the firm's clients.

Las Vegas Sands Corp., which reports earnings on Tuesday, saw its average share price jump 10 percent in April and MGM Resorts International, which reports earnings Wednesday, saw its shares jump 1.4 percent on an average daily basis.

Credit-Suisse gaming analyst Joel Simkins recently downgraded MGM Resorts to Underperform from Neutral, saying the company, which has 10 Strip resorts, is adversely impacted by a slow economic recovery in Las Vegas.

Simkins told investors MGM Resorts is the company most dependent on fly-in customers and increased airline traffic. Las Vegas, he said, is still vulnerable to reduced air capacity and rising ticket prices.

"While the Strip is recovering from its worst hangover, we do not believe it is improving at a rate fast enough to contribute additional equity value to MGM Resorts shares," Simkins said. "MGM proved too big to fail during the downturn, and we credit management for refinancing and extending debt maturities. However, MGM still has a mountain of debt that will limit the company's flexibility going forward."

JP Morgan gaming analyst Joe Greff, however, said the second- and third-quarter air lift -- or total airline seats into Las Vegas -- would be up 3.6 percent, following a 2.3 percent increase between January and March.

"We believe the air lift capacity data reaffirms our view that an increase in overall convention and group business trends, combined with a continued rebound in leisure travel, will drive visitation and rates in 2011 and 2012," Greff told investors.

The average daily share price of slot machine maker WMS Industries was down almost 8.5 percent in April, due in large part to the company's pre-announced quarterly earnings. The news disappointed shareholders and sent the company stock price down nearly 20 percent in one day.

Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871.

Average Daily Stock Price
Mar. 2011 Apr. 2011 Percent change
MGM Resorts International 13.08 $13.26 1.41
Las Vegas Sands Corp. 40.86 $45.11 10.40
Wynn Resorts Ltd. $124.21 $139.00 11.91
Boyd Gaming Corp. $9.50 $9.10 -4.24
Penn National $35.70 $38.33 7.39
Pinnacle Entertainment $12.81 $13.56 5.87
Ameristar Casinos $16.97 $18.99 11.90
International Game Technology $16.17 $16.47 1.88
WMS Industries $36.50 $33.41 -8.47
Bally Technologies $36.14 $37.99 5.13
SOURCE: Applied Analysis
 

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