Let's talk stock! First of all, we would like to address the oldest gaming companies around: the stock for land-based casinos such as Harrah's, Caesars and MGM.
[For the record, we do not endorse or recommend any of these companies " you must do your research before investing.]
If you have been reading since the first part, you might remember that the combined annual revenue of all the casinos on the Strip in Las Vegas is estimated at $5 billion. This sounds like good business! But besides their success in Vegas, the large casino names have also been expanding aggressively and opening new casinos in Europe and Asia-Pacific, where they hope to entice more people into playing.
As an example, here is some basic information about the most famous casino company of all, Harrah's Entertainment. Harrah's is traded in the New York Stock Exchange (NYSE) with the symbol HET. This was its financial info at the time of writing:
Last Trade: 88.35 ----------------------- Day's Range:87.60 - 88.80
Trade Time: 4:06PM ET----------------- 52wk Range:78.77 - 89.35
Change: 0.59 (0.66%)----------------- Volume:7,267,185
Prev Close: 88.94----------------------- Avg Vol (3m):2,445,030
Open: 88.75------------------------------ Market Cap:16.57B
Bid: N/A----------------------------------- P/E (ttm):23.50
Ask: N/A---------------------------------- EPS (ttm):3.76
1y Target Est:90.00-------------------- Div & Yield:1.60 (1.80%)
And for good measure, the Alpha index was 0.0019 (meaning it earned 0.19% more than expected) and the Beta index was 1.48 at the time (meaning it is 48% more volatile than the market).
Now you can make an approximate idea of the stock's profitability, volatility and expectations, but numbers aren't everything, and you must take into account other factors such as how famous the name is, how good the reputation, how solid the brand. This is some more information you should take into account:
- Harrah's Entertainment, Inc. was incorporated on November 2, 1989, which means it has been traded for almost 20 years now.
- As of December 31, 2006, the Company owned or managed 48 casinos, mainly based in the United States and the United Kingdom.
- As of December 31, 2006, Harrah's properties added up to three million square feet of gaming space and approximately 40,000 hotel rooms.
- Harrah's acquired London Clubs International plc, which as of December 31, 2006, owned or managed seven casinos in the United Kingdom, two in Egypt and one in South Africa. London Clubs also has four casinos under development in the United Kingdom.
- Harrah's owns the World Series of Poker brand and operates the tourneys in Las Vegas and London casinos.
From Reuters again, this is how this company compares to its peers:
P/E (12 mo. trailing) ------------- Lower
Price to Sales (12 mo. trailing)-- Lower
Dividend Yield-------------------- Higher
Sales Growth (12 mo. trailing)-- Lower
EPS (12 mo. trailing)------------- Higher
ROI (12 mo. trailing)------------ Lowerr
Now it is up to you to make sense of all the info, gauge the risk levels against the potential returns, and decide how much you want to invest in the casino industry. Unfortunately, you won't be able to invest in Harrah's stock because it recently went private (sorry!), but here is other major casino stock worth looking into:
- MGM Mirage: Mirage is traded in the NYSE under the symbol MGM. At the time of writing this the stock was priced at $65.90, which makes it more accessible than the pricier HET. We'll leave you to research all the numbers, and give you some non-numerical info: MGM owns and operates 19 casino properties in the United States, including the Las Vegas Strip, Bellagio, MGM Grand Las Vegas, Mandalay Bay, The Mirage, Luxor, and Monte Carlo casinos in Las Vegas; as well as having partial interest in major casinos like the Borgata, operating several golf courses and clubs and having a strategic alliance with the Mashantucket Pequot Tribal Nation.
- Wynn Resorts: Wynn stock is traded in NASDAQ as WYNN, and it is going for $97.85 at the time of writing. This most expensive of casino stocks was founded in 2002 in Las Vegas Nevada, and has grown into a little empire including, among other features, 6 dining restaurants, a nightclub, a lounge, a spa and salon, a Ferrari and Maserati automobile dealership, wedding chapels and an 18-hole golf course. They have recently expanded into Asia with the Wynn Macau Casino Resort.
- Ameristar Casinos: Ameristar stock is traded with the symbol ASCA in NASDAQ, and at the time of writing it was going for a more accessible $21.02. The oldest of this lot, Ameristar was founded in 1954 and is based in Las Vegas, Nevada. As of September 18, 2007, the company operated eight Casinos in Missouri, Iowa, Mississippi, Louisiana, Colorado, and Nevada.
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