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There are plenty of sub-sectors and stocks that are intimately linked to discretionary spending levels, but perhaps none more so than the casino group. Simply put, if the global economy is in poor health, logic dictates that investors will not favor casino stocks because it is discretionary spending that fuels trips to the blackjack table. Beyond that, Las Vegas is also highly dependent on revenue from business conventions and that revenue stream slows to a trickle during rough economic times.

These are lessons learned from the global financial crisis. Casino stocks have found better fortune over the past couple of years and those with more international than domestic exposure could offer plenty of long-term growth potential for savvy investors.

The international element is crucial to consider when investing in casino stocks because Las Vegas is no long the world's top gambling destination. Sin City long ago lost that throne to Macau, the former Portuguese colony that is the only Chinese territory where gambling is legal. In fact, Las Vegas is not even the world's number gambling mecca in terms of revenue. That honor goes to Singapore.

Location does not matter, but returns do and that's why this quote from an S&P Capital IQ is so important regarding casino stocks. "The casino and gaming business may be poised for a high-rolling 2012, thanks to signals both domestically and abroad that may bode well long term for the sub-industry."

The gambling industry's international flavor makes the Market Vectors Gaming ETF (NYSEARCA:BJK) worth a look. BJK devotes almost 62% of its weight to countries outside of the U.S. and over 45% of the fund's country exposure lies in the important Asia-Pacific region. BJK, which has an expense ratio of 0.65%, is up almost 19.4% year-to-date.

Analysts believe Macau can double its gaming revenue over the next five years and if ETF's aren't your cup of tea, consider Las Vegas Sands (NYSE:LVS) and Wynn Resorts (NASDAQ:WYNN). Not only are those two companies the two largest U.S. casino operators; they are the U.S. gambling firms with most exposure to Macau. Some analysts view Wynn is the top casino franchise in Macau.

For those looking to capture a slice of the rebounding U.S. gambling market, consider Penn National (NASDAQ:PENN), the second-largest operator of regional casinos in the U.S. Shares of Penn National are up 18% year-to-date and the company is expected to post EPS growth of 19% this year.

Risk-takers may want to consider newly public Caesar's Entertainment (NASDAQ:CZR). Since its IPO earlier this year, Caesar's has plunged almost 19%, as investors have not been keen on a balance sheet that features almost $21 billion in debt. Caesar's has some global exposure, but not enough in Macau and Singapore. In 2011, Caesars had $2.12 billion in debt-service expenses.

Combine all those factors and it's easy to see why Caesar's is one of the riskiest and most controversial bets in the casino group. Then again, we are talking about gambling stocks, right?

Source: Casino Stocks: A Gambler's Paradise