Casino gaming may be experiencing major growth in the state of Massachusetts. a tentative agreement to expand gambling was reached by the state's Senate, House and Governor, which would allow three stand-alone casinos. Slot machine manufacturers should benefit, along with major casino companies that may participate, such as Las Vegas Sands (LVS).
The company trades at 18 times forward earnings, had quarterly revenue growth of 47%, and an outrageous 882% increase in quarterly earnings year over year. Of course, the percentage increase is based on very low earnings for last year. Although the company carries $10 billion in debt, it does have $3.5 billion in cash. Business has been booming for Las Vegas Sands in Macau.
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WMS Industries Inc. (WMS) is a way to play the supplier industry. It develops, makes, and markets gaming machines and video lottery terminals, including slot machines and video poker gaming machines. The stock sports a forward price to earnings ratio of 10.2. Jefferies initiated coverage on the stock last year and gives it a Buy rating. The debt free company has $90 million in cash.
Wynn Resorts Ltd. (WYNN) is one of the major casino operators, with two casinos in Las Vegas and one in Macau. The stock carries a forward PE ratio of 22. It even sports a yield of 1.5%.
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Disclosure: Author did not own any of the above at the time the article was written.