After what has been a rough period for the industry, casino companies traded on Wall Street in the United States have begun to rebound during the final quarter of the 2010 fiscal year.
One company that has made a significant recovery since the midpoint of the fiscal year is MGM Resorts International. The ownership behind such properties as the Bellagio, Mirage, and Luxor in Las Vegas and the Gold Strike in Tunica had seen its share price fall to as low as $9.01 at the end of August. Over the past ten days, MGM Resorts International has begun to show signs that the company may be on the return to better days.
During trading on Friday, MGM Resorts International peaked at $10.53 per share before settling down to close the business day at $10.34. In the last ten days, the share price for MGM Resorts International stock has risen 13%. Although that is still 38% beneath its top price back in April, the increase is a harbinger when viewed with other casino stocks in the industry.
The Las Vegas Sands Corporation, the ownership behind the Venetian in Las Vegas, nearly set a new benchmark for a high point of its stock price during trading on Friday. After topping out at $31.99, Las Vegas Sands’ stock settled in at $31.62 by the end of the day. A look at the company’s past year, however, shows a sign that it is in good shape and poised to be a solid investment for its stockholders.
Back in April, the Las Vegas Sands Corporation – owned by one of the world’s richest men, Sheldon Adelson – was trading at $21.30. Since that time, the share price has soared in relation to other companies in the industry. The price at the close of business on Friday, $31.62, reflects a 48.5% increase from the company’s share price five months ago.
Two of the most impressive properties on the Las Vegas Strip, the Wynn and Encore, have also shown impressive results for their ownership, Wynn Resorts Ltd. During trading on Friday, Wynn Resorts showed a 0.71% rise in its stock price to close at $89.55. When viewed in the long-term since April – when it was trading at $75.83 – Wynn Resorts has been on the rise, improving its share price by 18% in the last half of the fiscal year.
After the announcement of a deal with Bally Technologies (one of the top slot manufacturers in the United States) to provide equipment to its casino developments in Illinois, Ohio, and Maryland, Penn National Gaming joined in the casino stock boom. By the close of business on Friday, Penn National Gaming was trading at $30.24, an increase of 7.3% from its $28.16 stock price in April.
Part of the reason for the current rise in casino stock prices could be attributed to the recovery that the U.S. economy is experiencing, albeit the recovery has been far slower than what many expected. For some casinos, such as MGM Resorts, the addition of new properties may be an explanation for the increase. MGM Resorts opened CityCenter Las Vegas, of which it has 50% ownership of with the international investment company Dubai World.
Although there may be a “bull on the loose” for casino stocks on the trading floor in New York, gaming revenues have been slow to follow in their recovery after the recession. In July, the Nevada Gaming Control Board saw a drop in casino “win” (revenue) of 6.65% compared to the same point in 2009. In July, the New Jersey Casino Control Commission reported similar numbers, falling 5% compared to what was earned over the same time frame in 2009.
