Most investors have to wait three months for quarterly updates about how business is going for the stocks they own. However, investors of casino companies such as Melco Crown Entertainment Ltd (ADR) MPEL 0.11%, Wynn Resorts, Limited WYNN 0.63%, Las Vegas Sands Corp. LVS 1.91%, MGM Resorts International MGM 1.72%and Caesars Entertainment Corp CZR 3.31% get access to a monthly bellwether for the casino business in Macau, China and Las Vegas, Nevada.
The Nevada Gaming Control Board and the Macao Gaming and Coordination Bureau provide monthly gaming revenue reports for the two largest gaming hubs in the world. These numbers provide insight into how revenue for these companies may be trending ahead of quarterly earnings reports.
Benzinga looked back to see whether or not these reports provide trading opportunities for investors.
Closest Pure Play
Melco Crown is the closest thing on the U.S. markets to a Macau pure-play. In the past 10 months, Macau has delivered eight monthly revenue beats compared to low market consensus forecasts. On the day following these monthly reports, Melco Crown stock has averaged a 3.3 percent daily gain. However, on the day following the two revenue misses, the stock has averaged a 1 percent decline.
Overall, Melco averaged a 3.3 percent move on the day after the monthly revenue release. That level of volatility is an indication that the market is certainly watching revenue numbers closely.
The Rest
The most recent monthly Macau report is a prime example. Following a big October revenue beat, Melco Crown jumped 8 percent. The rest of the Macau casino stocks traded up in-line with their relative exposure to the Macau market. Wynn surged 3.8 percent, Las Vegas Sands climbed 1.3 percent and MGM rose 0.8 percent. Caesars Entertainment, which has no Macau exposure, traded flat on the day.
MGM generates nearly 80 percent of its revenue from the U.S., the majority of which comes fromthe Las Vegas Strip. In the past six months, the Las Vegas Strip has delivered positive year-over-year revenue growth three times and negative growth three times. MGM stock is averaging…
Click here to continue reading
Want to learn more about how to profit off the stock market? Or maybe you just want to be able to look sophisticated in front of your coworkers when they ask you what you are reading on your Kindle, and you’d prefer to tell them “Oh, I’m just reading a book about stock market analysis,” rather than the usual “Oh, I’m just looking at pics of my ex-girlfriend on Facebook.” For these reasons and more, check out my book, Beating Wall Street with Common Sense. I don’t have a degree in finance; I have a degree in neuroscience. You don’t have to predict what stocks will do if you can predict what traders will do and be one step ahead of them. I made a 400% return in the stock market over five years using only basic principles of psychology and common sense. Beating Wall Street with Common Sense is now available on Amazon, and tradingcommonsense.com is always available on your local internet!
