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A Wynn-Win Situation

Tuesday, 28 Aug 2007 | 7:47 PM ET

A sacred pact on Wall Street – no big selling in the last week of August – was broken today, Cramer said. The Dow was down 280 points, and the Nasdaq was down 60, or 2.3%.

Wynn Win Situation
The world is Wynn's oyster, and Mad Money host Jim Cramer thinks the stock is going much higher.

Cramer blamed it on the release of the Fed minutes, which showed the market that he was right: Bernanke and friends knew nothing. What’s worse, though, is that the Fed thinks it solved the problem, Cramer said. Despite today’s drop, the central bank offered no cash relief.

It was a rough day, no doubt, but there’s always a bull market somewhere, and Cramer thinks he found one in gambling.

Investors don’t often hear an earnings call as good as the one Wynn Resorts made last quarter, Cramer said. In fact, he called it the greatest from any company for Q2.

While most companies drag on and on about their accomplishments, filling in holes with excuses for their mistakes, Wynn’s statement, paraphrased here, was short and to the point: We blew away the numbers, and our casinos are cash machines. Cramer was so excited he said he has been waiting for a down day to recommend the stock.

According to Wynn, each of its properties generated over $1 million in EBITDA per day. Q2 EBITDA was $92.7 million, which was 17% above the first quarter and 58% over the fourth quarter last year. “We believe that our product and service are the best in each of the markets where we operate and that our numbers reflect that,” the company said.

So while the many in the industry might be focused on the opening today of Las Vegas Sands’ Venetian in Macau, that gambling star in the east, Cramer’s eyes are locked on WYNN. It’s hard not to like a stock that didn’t have many down days despite such a difficult August.

Here at home, WYNN’s numbers were better than LVS. And for the first time, Macau brought in more revenue than Vegas. WYNN is also one of the six casinos licensed to operate in Macau. All other companies that want to do business there have to sub-lease from these six, which probably won’t happen, Cramer said, because who wants competition?

WYNN also has $1 billion left in its buyback, which, when it’s done, will amount to about 8% of the market cap.

“The world is Wynn’s oyster,” Cramer said. “The conference call was perfect, and I think this stock is going much higher.”

Questions for Cramer? madmoney@cnbc.com

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