UPDATED FRIDAY FEBRUARY 3, 2012

THIS PAST WEEK WAS AN OKAY WEEK AS FIVE OF THE NINE STOCKS WE FOLLOW ROSE ON THE WEEK, BUT SEVEN OUT OF THE NINE STOCKS WE FOLLOW ARE STILL SHOWING A LOSS FOR THE PAST 52-WEEKS. 

On the "Stock Market Notes" page I have a report about how Wall Street is having a nice gain to start off the year helped by lower unemployment and more jobs.  More jobs can mean more business for the Vegas and casino gaming stocks that we follow.  But it will still take some time for more wealth on Main Street America to reach Las Vegas Boulevard and our gaming companies. 

The Dow Industrials were up more than 600 points during the first five weeks of 2012, and that's a good sign for those who follow the so-called January Indicator or January Predictor or the January Effect.  This past week the Dow was up about 202 points with most of the gain coming on Friday following the report about more jobs being created and a slight drop in the unemployment rate.

This past week was a good one for the gaming stocks we follow.  It wasn't a great week, and actually it was just an okay week.  Five of the nine were higher on the week, three were lower on the week, and one was unchanged.

One of the big developments this past week was that Caesars Entertainment announced that it had plans for an IPO and public stock issue.  You can read more about the press release that Caesars put out, and some of my comments about it by clicking here.  A successful IPO for Caesars could help all of the casino and gaming stocks.

The real problem, however, comes when you look at our list of 9 gaming, casino and Vegas stocks, because seven out of the nine are showing losses for the previous 52 weeks.  This means, quite bluntly, that had you invested in this list of stocks one year ago you'd be taking a bath in all but two of them.  And that wouldn't be a spa bath I'm talking about -- it would be a dirty bath in cold, blood chilling red ink.

Most of our gaming stocks were losers for 2011 and now nearly all are losers for 2012.  Luckily we're only five weeks into 2012.  But the point should be taken.  And for the year 2011 the Dow was up 5.5% and that was better than the 7 of the 9 casino and gaming and Las Vegas stocks that we follow that were lower on the year 2011.  Frankly, had you put your money into the "Main Street" stocks that make up the Dow Industrials you would have been better off than putting your money into the "Las Vegas Boulevard" stocks that make up the big gaming issues that we follow.

Here's the bad news for the casino and gaming stocks for 2011.  Of the 9 casino stocks that we watch here every week, only two showed a percentage gain for the previous 52 weeks that made up 2011.  In summary, the overall stock market did much better than the casino and gaming sector did in 2011. 

This past week was "okay" for our casino stocks with five of the nine showing gains and three lower and one unchanged on the week.  But for the most part, the Vegas and gaming stocks we follow were just flat.

Shares of WYNN were the biggest losers on the week, down $5.10 on the week to $114.89 on news that during the fourth quarter of 2011 the company had disappointing revenue.  WYNN had finished 2011 with a 52-week percentage gain but it is now down 4-percent from where it was 52 weeks ago.  In other words, you didn't do much with your shares in the this company over the last year -- and you actually lost money.

Shares of Las Vegas Sands rose by $2.23 this past week on top of $3.22 a share the week before/  Shares of LVS are now up 3% from a year earlier closing at $51.91.  On the positive side, four weeks earlier the shares were down 11% over the previous 52-weeks.

I can't emphasize this enough: nearly all of our casino and gaming stocks are lower than what they were a year ago.  To put it bluntly, had you bought our list of gaming stocks a year ago, you'd pretty much be wishing you had stayed out of this Wall Street Casino. 

The only stocks showing a gain for the previous 52-weeks are MPEL and LVS.  MPELis not even an American gaming issue -- it's the Macau gaming company.  MPEL is showing a gain of 61-percent and that's up from the 53% gain it was showing five weeks ago.  LVS is now up 3-percent over the previous 52 weeks.  A week earlier it was showing a percentage gain of 6-percent over the previous year.

WMS the slot machine maker had some nice gains in previous weeks but this week it lost 97-cents a share and closed at $23.03 and this stock is now down 45% from a year earlier.

There is still no good news, or rally, for Las Vegas Railway Express and XTRN is its symbol.  XTRN was unchanged on the week at only 10-cents.  And that puts it down 18% from where it was 52 weeks earlier. IGT was down 50-cents on the week to $15.59 a share and it is now down 11% from a year earlier.

One stock that recently dropped off our list of stocks showing a percentage gain for the past 52 weeks is MGM which is now down 5-percent.  XTRN  is now showing a year over year loss of 18-percent and last year this stock was showing big percentage gains.  The stock that consistently has been showing a percentage gain is MPEL which is up 61-percent now which is an improvement from a week earlier.

WYNN had a nice run in recent weeks but it lost steam over worries about the economy in China losing steam and the effects that will have on gaming in Macau.  There have been more reports about strong gaming in Macau but at the same time there are strong warnings about economic troubles there.  The fourth quarter of 2011 had disappointing revenue numbers.

LVS rose $2.23 a share on the week. LVS is still hurting from worries about Asia as well as worries about its domestic casinos.

MPEL was hit very hard a few weeks ago after a broker downgraded the stock.  MGM gained $1.27 this past week and closed at $14.42 a share.  It is down 5% on the year.

IGT had some gains in previous weeks and this past week it lost 50-cents and closed on Friday at $15.59 a share.  If you bought the stock a year earlier you'd now be showing a loss of 11-percent.

To keep the gaming sector strong the economy has to be saved.  While there are stories that gaming increases during hard times it is doubtful that in today's economy with high unemployment, falling real estate prices, and consumer uncertainty that many gamblers will make the trek to Las Vegas Boulevard to gamble when they can get in their cars and make the relatively short drive to their local casino or Indian gaming establishment.  And now that gasoline pump prices in California are below $4 a gallon again, there is some optimism about road travel to Vegas will be picking up.  But gas is still expensive at $3.50 to $3.95 a gallon and those nearby card clubs and Indian casinos are looking more attractive to California residents as a result of prices staying stubbornly high.  California is the largest market for Vegas casinos.

Of course people will get to Vegas when there is a big event such as a fight of a lifetimeor a big building implosion.  So maybe leveling the Harmon in CityCenter will help boost traffic at least for a weekend.  And that big event appears to be getting closer.

The big question is if the world's banks and governments can resolve the current financial worry and get the markets back to a firm footing, and if the unemployment rate can get cut quickly with job creation -- and not just from workers leaving the labor market which is probably behind the slight drop in unemployment during November.

Eight of the nine stocks we followed here had a double-digit percentage gain in 2010, and every one of those gains beat the Dow 30, and seven of the eight winners had percentage gains that also beat the S&P 500 (13% gain) and the NASDAQ (17%) gain for the year 2010.

Here is how our stocks did for the year 2010:

LVS up 208%, WYNN up 78%, BYD up 27%, MGM up 63%,IGT down 6%, MPEL up 89%, ISLE up 37%, WMS up 13%, and XTRN was up 67% on the year.

Now compare that to how the stocks did for the year 2011:

LVS down 4%, WYNN up 9%, BYD down 29%, MGM down 30%,IGT down 2%, MPEL up 53%, ISLE down 55%, WMS down 54% and XTRN was down 50% on the year.

That's quite a reversal during 2011.

More About Las Vegas Railway Express

Las Vegas Railway Express is turning out to be a very volatile stock.  A few months ago the stock XTRN was as high as 45-cents a share.

We learned that Las Vegas Railway Express has a deal with the Plaza Hotel and Casino in downtown Las Vegas to use the old train station and existing rail tracks that go to the Plaza.  This was confirmed by both XTRN and the Plaza management.  The train station at the Plaza hasn't been used in years, but the rails still exist.  An official of the Plaza also told me that they are looking into building a new rail system into the Plaza for high speed trains.  The Plaza official also told me that it will be involved with marketing and selling train tickets for travel.  The Plaza reopened on August 24, 2011.

XTRN is now planning to offer rail service between Southern California and Las Vegas probably this coming summer of 2012. 

For weeks we wondered about a train station for the X Train to use, and now we know what that part of the plan is.  And we understand management is confident this new time schedule will stand for service to start in mid-2012.

Las Vegas Railway Express, XTRN, is but one of the companies that wants to offer passenger train service between Southern California and Vegas.  Other projects include a proposed high speed rail line that is multi-millions of dollars and several years away, plus another line to operate on existing tracks known as the "Z Train."  A report on the X Train and the Z Train is on our website on our "Travel / Vacation" page.

There is not much public information about the "Z Train" either, but we have learned that the Z Train project is now being called the Pullman Company and see our report on the "Travel / Vacation" page.

A couple of months ago X Train stock was as high as 45-cents a share, so it is down about 75-percent from that recent high.  For the year the stock is now down 29-percent -- but about nine months ago the stock was showing a year to date gain of 1,600 percent.  This is quite a "reversal of fortune" to steal a phrase.

Of course there is also a lot of discussion and speculation about a high speed rail line in California that will be partially funded by State and Federal taxpayer money -- but it should be pointed out that that high speed rail line is not planned to go to Vegas.  There is another group with plans for a high speed rail line to Vegas called DesertXpress but that is not part of the high speed line project that has federal funding.  And we have to wonder what a downgrade of U. S. debt and rising interest rates could do to any fund-raising and investment for projects such as these.

About the Vegas Economy 

One thing is certain: Las Vegas can't be healthy if the American economy isn't healthy.  There are doubts about the lingering sluggishness in the economy and that is not allowing Las Vegas and other gambling meccas to recover.  And there are more worries about a double dip recession despite the talk about a recovery.  Vegas can't get more revenue when the rest of the country is pinching pennies and worried about jobs. 

A year ago I said it was possible that the "easy money" to be made in the casino stocks might be behind us.  Now, I'm sure of it.  The easy money making time is over.  In fact, with most of the stocks now showing losses from a year ago, you might wonder if there is any upside potential left for these issues?

While a few of these stocks are still showing modest gains from a year ago it will take a lot more to get these stocks back to their record highs that were set before the recession.  And with the selling of the past few weeks it might be hard to convince investors that these stocks are good bets.  Vegas and gaming have a long way to go before full recovery and it will depend on the overall economy. 

Best wishes, Alan Mendelson

THE STOCKS WE FOLLOW AND THEIR SYMBOLS 

These are the stock symbols of the companies we are following in the article below, and you can use these stock symbols to check these shares on a daily basis:

Las Vegas Sands  LVS, MGM Resorts   MGM, Boyd Gaming   BYD, Wynn   WYNN, International Game Technology   IGT, Melco Crown Entertainment   MPEL, Isle of Capri Casinos  ISLE, WMS Industries  WMS, and Las Vegas Railway Express which trades under the symbol XTRN as an over the the counter stock.