IT'S BEEN MANY MONTHS SINCE WE UPDATED THIS REPORT...
Update January 31, 2014 It's been many months
since we updated this report on the Las Vegas and casino stocks. Recently there has been renewed interest in this section
of our website and so we are going to resume our reports.
Here are the stocks we
follow, their symbols, how they closed on Friday, and the percentage from one year earlier.
Las Vegas Sands LVS $76.80 Up 39%
Wynn WYNN $219.91 Up 74%
BYD $10.56 Up 51%
MGM Resorts International
MGM $24.40 Up 91%
Caesars CZR $22.01
Melco Crown Entertainment MPEL $40.99 Up
Isle of Capri ISLE $9.56 Up 36%
International Gaming Technology IGT $14.43 Down 6%
Scientific Games SGMS $14.08 Up 58%
What ignited Caesars a year ago was news that gaming action had increased in Las Vegas and that online poker was legalized
in Nevada, New Jersey and other states. Caesars is already well established as an online company
in Europe. Company officials expect CZR will also benefit from online gaming in the
various states through Caesars and WSOP branded online poker and online gaming sites and the
company might be offering online players bonuses and incentives to get them to visit its brick and mortar casinos.
CZR also has casinos in Atlantic City, New Jersey. But the company is still overloaded with debt and
it will be issuing more debt (bonds) to lower interest rates it pays, and it is selling some casinos around the country to
raise capital and streamline operations. The company's project at Center Strip in Vegas for commercial and non-gaming
entertainment including a giant "wheel" is also getting positive reaction in the media.
The gaming sector is now showing overall strength -- though it is modest strength.
LVS is primarily a stock that reflects overseas gaming interests in Asia and quite possibly Spain
in the next couple of years -- and that's what's been driving this stock.
remains the highest price stock on our list.
Boyd Gaming is a true
domestic company and it got a lift when it finally made a deal to sell off its North Strip development which allows
it to focus on its better ventures.
MPEL is the big player
is the symbol for the Las Vegas Railway Express has been dropped from our list of Vegas and casino stocks
because its plans for passenger train service between Southern California and Las Vegas has been put on ice or derailed --
you pick the term you'd like to use. The company is now trying to market itself as the provider of luxury rail cars
with luxury services but it doesn't have any deals yet with any railroads and that market has plenty of competitors.
It is also trying to become a rail travel agency.
Las Vegas Railway Express 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. However, at this time is appears that the high speed rail project will not receive federal funding.
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.
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 the government's 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 which was
called DesertXpress and is now called XpressWest but that is not part of the high speed line project that has federal
funding. But XpressWest in July of 2013 was told it will not get federal funding and that pretty much derails
this project. It still might try to get federal funding or come up with some private funding. It had been making
plans to coordinate with the Los Angeles Metro train system to link to passenger trains in northern Los Angeles County and
ultimately to Victorville where it expects to have its station for departures to Vegas. Meanwhile, 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
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.
Two years 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.
and gaming have a long way to go before full recovery and it will depend on the overall economy.
Best wishes, Alan Mendelson