Gambling Stock Roundup: Disappointing Results, Expect Volatility
Zacks Investment Research | Mar 10, 2015 01:27AM ET
The first week of March proved to be disappointing for the gambling industry. Macau's Gaming Inspection and Coordination Bureau announced a decline in gambling revenues for the month of Feb 2015 – marking the ninth straight month of decline.
Also, Rolling Chip Turnover at Iao Kun Group (NASDAQ:IKGH) plunged in Feb 2015 – marking the fifth consecutive monthly decline. Both the downsides can be attributed to China’s anti-corruption campaign that is hurting footfall in Macau.
In one other development, Caesars Entertainment (NASDAQ:CZR) released dismal fourth-quarter 2014 results. The company’s quarterly loss was wider than the Zacks Consensus Estimate. Revenues also missed the consensus mark. Caesars Acquisition (NASDAQ:CACQ) also posted disappointing fourth quarter results. (Read last development: Gambling Stock Round Up for Mar 2, 2015)
h3Recap of the Week’s Important Stories:/h3
1. Macau gambling revenues for the month of Feb 2015 plunged approximately 49% to 19.54 billion patacas – marking the ninth month of consecutive decline and the fifth consecutive month of double digit decline. February’s decline was also higher than the Dec 2014 record decline of 30%.
Despite the Chinese New Year holidays that spanned from Feb 18 to Feb 24, gambling revenues witnessed a huge fall owing to the nationwide crackdown on corruption in China. Meanwhile, a cooling Chinese economy, political unrest and a smoking ban on mass market gaming floors have compounded woes. (Read: Caesars Entertainment Down on Wider-than-Expected Q4 Loss )
4. Caesars Acquisition Company posted disappointing fourth quarter results with adjusted earnings of 1 cent that declined significantly year over year. Also, the company significantly missed the Zacks Consensus Estimate of 10 cents. Caesars Acquisition Company is a casino asset and entertainment firm that was formed to make an equity investment in Caesars Growth Partners, LLC, a joint venture between CACQ and Caesars Entertainment. CACQ is CGP LLC's managing member and sole holder of all of its outstanding voting units.
During the quarter, the firm commenced operations at The LINQ Hotel & Casino following the completion of Phase 1 of renovations.
Share Price Performance
Share price of most of the companies declined over the last five trading sessions with the highest decrease of 9.2% recorded by Caesars Entertainment on lackluster fourth quarter 2014 results, followed by a 3.9% decline at Wynn Resorts (NASDAQ:WYNN)
Over the last six months, share price of most of the gambling stocks lost value with Caesars Acquisition witnessing the maximum decline of 30.2%, followed by a decline of 21.4% by Wynn Resorts. However, Boyd Gaming (NYSE:BYD) gained 24% over the same time frame.
Get The News You Want
We note that gambling stocks have oscillated between gains and losses in recent sessions and investors can expect this volatile movement to continue in the coming days as well.
Original post
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.