Investing
in gaming stocks recently has been like playing a broken slot
machine, it just hasn't been paying off.
Goodness
knows that too many players seem to have "donated" enough
money on the tables that they should own some of the casinos
and would expect the share prices of some of these companies
to reflect the play, but the overall market segment has been
steadily declining despite positive earnings releases and
strong "buy" recommendations from Wall Street analysts.
MGM
Mirage (MGG) was down 3.9 percent to $32; Park Place Entertainment
(PPE) was off 2.4 percent to $12.81; Harrah's Entertainment
(HET) fell 3 percent to $23.94. And the Mandalay Resort Group
(MBG), which owns such mega properties as Mandalay
Bay, the Luxor,
the Excalibur
and the Circus
Circus was hit the hardest, with a 5.1 percent drop to
around $20, well off of its 52-week high of $28 3/8 per share.
"Gaming
and lodging stocks continue to trade below their historical
mean, despite strong earnings-per-share growth relative to
the S&P 500. We estimate earnings-per-share growth will be
15-20% in 2001," said
Senior Gaming & Lodging Analyst Harry Curtis, from the investment
bank Robertson Stephens, at the firm's Consumer Conference
in New York.
"I don't
see any disappointments coming out of any of the major companies,"
said Jeffrey Logsdon, gaming analyst with Gerard Klauer Mattison
in San Francisco. "I don't think any of the numbers out of
the regional markets or the major gaming centers have shown
any sign of weakness. Bookings look
extremely
strong and pricing on rooms is 10 percent to 30 percent ahead
of last year. It is actually a very strong macro picture."
According
to figures published by the Las Vegas Convention and Visitors
Authority visitor attendance is up 8.4% from last year and
the hotels in Las Vegas boast a better-than-90% occupancy
rate. The number of convention attendees is also up 4.5% from
1999. So many investors and analysts are left asking themselves
"When will the machine payoff?"
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