Wynn Resorts Shows Impressive Numbers and Growth Potential

Of all the incredible hotels I saw this past weekend in Las Vegas, the one that stands out is the Wynn (WYNN). I don't know if it was the oxygen they pump into that place or if it was because I spent too much time in the sun, but standing in the air conditioned pathway underneath the unique colorful fresh flower balls just in front of the Casino at 6:00 am on a Sunday morning is a truly special place.

WYNN becomes even more special when you realize they are putting the pieces in place to fuel continued high earnings growth. For example, I saw firsthand the construction of the enormous new Encore branch which will house additional restaurants, retail shops, meeting rooms, and conference facilities.

Further, international growth prospects could be amazing. For example, the newly formed Wynn in Macau, China posted higher than expected revenues, and is full speed ahead on expansion. Additionally, there is talk of opening a Wynn Casino in Japan after the government opens the market.

As icing on the cake, Wynn continued its accelerating organic earnings growth trend Tuesday by posting earnings of $0.92 per share versus estimates of only $0.53 (see conference call transcript). This is the third quarter in a row WYNN beat street estimates by an increasing rate, and the stock was up over 10%. Also, management recently authorized a large share repurchase, which indicates to me they think the stock may be undervalued and they see potential for strong price appreciation.

Finally, the PEG ratio of 1.32 is low and low for the industry, and I suspect this I will only improve over the coming weeks as analysts will likely increase their growth estimates (they're always late to the party). I will definitely be taking a closer look at WYNN, and I encourage any and all feedback on the stock.

Disclosure: Author has no position currently in WYNN