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Wynn In Play? MGM A Bad Fit, Galaxy Or LVS Better, Either Way Bullish For The Stock

Apr. 09, 2018 1:47 AM ETWynn Resorts, Limited (WYNN)MGM, LVS44 Comments


  • Speculation that MGM might be mulling a move on Wynn makes little sense strategically or financially.
  • Las Vegas Sands, a more logical buyer, is tightly focusing efforts and resources on the developing Japan prospects.
  • Galaxy bought 5.3% of Wynn: The company looks well-positioned to scoop up more; It is a good strategic fit.

Understandably, since the sudden departure of Steve Wynn right after the Wall Street Journal accusations of sexual misconduct surfaced last Jan. 26th, speculation has soared as to what lies ahead for a Wynnless Wynn (NASDAQ:WYNN). My own view, often expressed on SA, has been that the most viable and logical buyer would be Las Vegas Sands (NYSE:LVS). I believe LVS offers the best strategic, financial, operational and corporate culture fit for both companies. I continue to believe that to be the case.

However, we have had news this week that the ever diddling members of Japan’s two coalition parties have finally agreed on several critical issues at the heart of the enabling IR legislation. It would appear that we could see a final bill voted on favorably by Q3 or before with the bidding process ramping up in earnest by early 1Q19. A broad consensus of industry, legal and political sources in Japan we check with periodically on the IR initiative, continue to agree that Las Vegas Sands is by far the leading candidate for the first license award and for a site in the plum market of Osaka. Of course, this is politics and anyone who presumes to predict the erratic inner scuffling of officialdom in such cases, must honestly caution that there is always an element of astrology in these political decisions. The conjecture among experts sometimes does sound like the reading of horoscope signs. I, and many others, prefer to make educated guesses. That’s about as close to a bettable forecast as it is reasonable for anyone to expect.

We have also had the sudden, stunning development that Galaxy Entertainment Group (HKG: 0027), the Hong Kong-based giant of Macau gaming, laid just under $1bn on the barrelhead and picked up 5.3% of Wynn shares in a private sale from the former CEO. By any measure, a

This article was written by

Howard Jay Klein profile picture
Leader of The House Edge
The single go-to source for gaming and sports betting stocks on SA
I am Howard Klein, Publisher and Publisher of THE HOUSE EDGE casino investment site on SA. Tip Ranks ranks me as 68 out of all 10,000 global gaming/leisure analysts, and my success rate is 77% with a 20% average return.

For 30 years I held senior vp and exec VP positions in major casino hotel operations among them Caesars, Ballys, Trump Taj Mahal and have done extensive consulting assignments for many others in the US, including the native American property Mohegan Sun, in Connecticut. I have also done special projects for Caesars Palace in Las Vegas. I was the founder and publisher of Gaming Business Magazine, first ever publication covering the gaming industry and have written extensively about the industry.

My two books are presently sold as Kindle ebooks on the Amazon site: MASTERING THE ART OF CASINO MANAGEMENT and THE GREAT AMERICAN CASINO BAZAAR. I have appeared on industry seminar panels and on national radio and television discussing various aspects of industry growth. I am a graduate of NYU's Stern School of Business and did work toward a Master's degree in economics at the Columbia School of General Studies.

MY INVESTMENT STRATEGY: Due to the necessities of my casino consulting business which encompasses many top gaming companies, I have placed my own gaming portfolio into a blind trust over ten years ago. At that time I instructed my money manager(who is a former industry colleague herself as well as a corporate lawyer and money manager) to follow my gaming investment strategy along these lines. 

1. I am a value investor first. Knowing the industry in depth I am able to plumb opportunities and problems others cannot see. Mostly I like to identify price ranges over given periods where I believe the market is asleep and I can buy in at the lowest possible risk. 2. I am a strong believer in management quality. Knowing so many top people in the industry allows me to evaluate which ones I believe have the "right stuff" to move a stock and which are populated by corporate drones. 3. I have instructed my manager never to trade on sugar high spikes in earnings or news per se but use the "string theory" I have developed which in brief, follows a skein of news and earnings releases over set periods of time for each stock and then move in or out. 4. I have instructed her to keep the portfolio diverse with holdings in four basic areas: Casino stocks in Las Vegas, Macau and the regionals, gaming tech stocks with real moats not just cute apps. 
I am pleased to announce that as of September 1, 2022 I am expanding my coverage to include entertainment stocks, a sector undergoing a massive revolution on many fronts. This has sprung loose many investment ideas in the space I expect to share with members. The coverage is added at no extra cost. 
I have been involved in the entertainment sector as well for decades involved in overseeing show and events in my properties as well as independent productions. I currently sit on the board of privately held Atlas Media Corporation, one of America;s premium non-fiction producers of tv and film programming.

Overall I have done immensely well and share my views with SA readers and more specifically with strong recommendations and gaming stock strategy analysis based on my network of industry contacts for subscribers to my SA Premium Site: THE HOUSE EDGE.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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