Here are the top casino stocks investors should hold onto this year.
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00:00We like Wynn Resorts right here. This is the Cartier of casinos, right? This is the luxury
00:06property. If you can afford it, you will choose Wynn. They have two beautiful properties in Las
00:12Vegas. They have two assets in Macau, and they're building the first casino ever in the UAE.
00:21They also have a property in Boston. So they have seen really strong improvements in terms of hotel
00:29rates and casino levels. We like where the company is from a leverage standpoint. They have about
00:35four times debt to EBITDA leverage. They've been buying back stock and looking to improve margins.
00:42The stock kind of round-tripped in 2024, I would say mainly because of what we saw in China,
00:49the fits and starts of the recovery in China. Obviously, that is more of a negative part of
00:55the story right now, but I think that will recover. But yes, as we look at Las Vegas,
01:00I think that luxury customer is very insulated at this point, and they love the Wynn property.
01:09They love the experience, the product, the service, the cost per day to run.
01:16One of their assets is well over a million dollars, and that's an experience that people
01:21really like. You're not seeing that at other properties on the strip.
01:26And then the second one would be MGM Resorts. Their collection includes properties like
01:32the Bellagio, Cosmopolitan, and Mandalay Bay, and a number of others. But those are the two
01:40companies. We kind of like that mid to higher end for Vegas because if we do experience a slowdown
01:46in the US economy, I think those individuals still want to go out to the sphere, go to a
01:52concert, go to a Las Vegas Raiders game. And then when we have the baseball team, the Athletics,
02:00moving to Las Vegas in a couple of years, I think that's even going to bring more customers to those
02:06high-end properties. We want to see growth. We want to see exposure to that high end.
02:10I think the companies that aren't innovating, aren't growing are probably going to be the
02:16ones that are more challenged at this level. I think the market is rewarding companies with
02:24growth, with deleveraging opportunities. So I'd say the ones that are kind of standing still
02:30at this point are the ones that aren't going to see a benefit. Clearly, with interest rates
02:36hopefully coming down at some point, that should help the overall valuations of these companies.
02:42But it's the ones that are standing still, not taking advantage of the growth in digital,
02:47not taking advantage of synergy opportunities through mergers and acquisitions. Those are
02:54the ones we'd stay away from at this point.