U. S. casino/resort companies rallied like crazy this week after China announced interest rate cuts and other measures designed to stimulate the economy. Investors took this to mean that major stocks in the gambling industry with operations in Macau would stand to benefit.
The CPC Central Committe, with President Xi overseeing it, described further actions such as a “one time allowance for disadvantaged people” to hit just before a national holiday next week. This type of monetary “stimulation” is quickly bringing Wall Street money back into those casino/resorts with China-based gambling spots.
The sense is that big players in Asia (and perhaps the disadvantaged as well) will now be showing up to gamble in Macau more often with even more money. Whether this plays out as imagined is another question, but investors were not waiting to go ahead and buy these stocks.
4 Rallying Casino Stocks With Macau Resorts.
WYNN Resorts (NYSE: WYNN), with a $10.83 billion market cap, operates Wynn Tower and Encore Tower in Macau, with 1010 guest rooms, a few restaurants, many gambling activities and the Moon Jelly Aquarium. Inside the resort is similar to the insides of the Las Vegas resorts but a look outside the windows here sees China, not Nevada.
On the daily price chart below, note how the price is now back above the 200-day moving average and quickly. The heaviness of the buying volume tends to offer confirmation of the up move. Morgan Stanly just upgraded Wynn Resorts from “equal weight” to “overweight” with a price target of $104.
Las Vegas Sands (NYSE: LVS) owns and operates five integrated resorts in China tourist destination: The Venetian Macao with 2905 suites, the Sands Macao with 289 suites, The Londoner Macao with 6022 suites and The Plaza Macao and Four Seasons Hotel Macao with 379 rooms and suites.
Market capitalization is $37.65 billion.
Miriam Adelson, the wife of the late CEO Sheldon Adelson, owns 56% of the shares in the company. She’s been making big donations to the campaign of former President Donald Trump. There’s no word, however, on the availability of Trump Shoes or Trump Watches at the resort’s Macao gift shops.
The daily price chart (below) shows the sudden dramatic rise in the price of Las Vegas Sands. Now trading well above the 200-day moving average, for the first time since April, it’s clear that investors definitely like the news about stimulus from Chinese government officials.
MGM Resorts International (NYSE: MGM) has a market cap of $12.04 billion, trades with a price-earnings ratio of 14 and a debt-to-equity ratio of 9.88. MGM Macau contains 580 rooms and suites along with the casino and restaurants.
It’s not as big a presence in the town as the Wynn and the Las Vegas Sands presence, so the stock, while having a good day Friday, failed to make it back above the 200-day moving average. Here’s the daily price chart:
Melco Resorts & Entertainment (NASDAQ: MLCO) operates Altira Macao, a 38-story casino resort with 230 guest rooms including 24 VIP suites and eight villas. Market capitalization for the company is $3.39 billion. JP Morgan in July had downgraded Melco from “overweight” to “neutral” with a price target of $7.
The stock’s price took off Friday to its second closing session above the 200-day moving average.
No artificial intelligence was used in the writing of this piece.
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