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Wynn Resorts Ltd. (WYNN) - Looks Expensive To Me

|Includes:Wynn Resorts, Limited (WYNN)

Before I looked at Wynn Resorts, I took a peak at Caesars (NASDAQ:CZR) and Boyd Gaming (NYSE:BYD). Caesars operating cash flow minus its capital spending presented as consistently under water, in 2012 as well as thus far this year. Turning to Boyd Gaming, the cash flow picture looks better, as if it potentially could turn positive, but I don't think Boyd's cash flows are quite approaching positive territory just yet.

Frustrated, I shifted my focus to Wynn Resorts. Wynn Resorts has positive cash flows, but when I discounted my free cash flow number for Wynn Resorts by my estimate of its Cost of Equity Capital, I arrived at a target price of about $147. This was taking into account the stock's beta from Yahoo Finance of 1.6 and estimated growth rate of 10.5% from the same source. My Cost of Equity figure came to 19%, and my free cash flow estimate was $1.145 billion.

In conclusion, I don't see any compelling reason to rush out and purchase any of these names.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Stocks: WYNN