Investors could consider betting on casino stocks once more.
The new coronavirus outbreak has wreaked havoc on casino stocks over the last year. The gambling business is coming alive again after being battered by the epidemic and a potential crackdown in China. Commercial gaming revenue touched a record high of $13.89 billion in the third quarter, according to the American Gaming Association (AGA). The AGA further stated that the $38.67 billion in revenue earned in the first nine months of 2021 is already higher than the total revenue generated in the entire year of 2020.
As a result, in the future year, investors may choose to consider casino stocks like this trio for their portfolios.
1. Caesars Entertainment (CZR)
CZR stock is not only trading at triple bottom support, which dates back to March, but the RSI, MACD, and Williams’ percent R are all in the oversold area. In the short run, experts want to see the CZR stock attack before resistance around $120 if I’m betting on a rebound.
CZR stock is cheap, according to B. Riley analyst David Bain. He now rates the stock as a “buy” with a $191 price target. “The operator’s regional portfolio remains healthy,” he continued, “and Las Vegas continues to be a source of strength for the company.”
Furthermore, earnings haven’t been that bad either. The company reported GAAP net revenues of $2.7 billion in the third quarter of 2021, up from $1.4 billion in the third quarter of 2020. It also reported a GAAP net loss of $233 million, which is far better than the $926 million loss reported the previous year.
Additionally, occupancy rates are greater. Furthermore, “Caesars is hopeful for the second half of 2021 and into 2022, anticipating groups to start flocking in force to Las Vegas,” according to the company.
2. MGM Resorts International (MGM)
MGM Resorts’ battered stock has been trading at crucial support levels since August. As a result of the oversold conditions, the Relative Strength Index (RSI), Moving Average Convergence Divergence (MACD), and Williams’ percent R are all starting to pivot higher.
Furthermore, MGM Resorts has benefited from BetMGM’s popularity. MGM expects sales of at least $6 billion in the third quarter of 2021, despite a $100 million deficit in the previous quarter.
Finally, MGM reported net revenues of $2.7 billion in the most recent quarter, up 140 percent year over year (YOY). Operating profit was $1.9 billion, opposed to a loss of $495 million the previous year at the same time. In addition, net income was $1.4 billion, compared to a loss of $535 million the previous year.
3. VanEck Gaming ETF (BJK)
An exchange-traded fund (ETF) like the VanEck Gaming ETF is another excellent option to profit from the resurgence in casino equities. The ETF provides greater diversification at a lower cost, with an expense ratio of 0.92 percent. BJK is currently trading at $41.30 a share and provides exposure to top casino stocks like Penn National Gaming, Wynn Resorts, Las Vegas Sands, MGM Resorts International, Caesars Entertainment, and Churchill Downs (NASDAQ: CHDN).
Disclaimer: The author has no explicit or implicit holdings in the securities referenced in this article as of the publication date. The writer’s views are expressed in this article, which is subject to the Zumm.org Publishing Guidelines.