Sell Block: Cash Out of the Casinos
We rolled the dice with casino stocks and won, but now it’s time to take our chips off the table.
As the real-estate market collapses and the economy slows, companies like Las Vegas Sands are feeling the crunch, Cramer told viewers Thursday. He pointed out LVS’s 19-cent earnings miss last quarter as proof. And even though Wynn Resorts and MGM Mirage beat expectations, those stocks should be sold, too.
The problem is that high property values have been holding up these stocks, and those values are starting to fall – precipitously. Not to mention, it’s more expensive than ever for people to travel to Vegas and Atlantic City. Gas for a round trip between New York and A.C. is up 37% over the past two years, and Los Angeles to Vegas is up 26%.
Competition’s growing here in the U.S., developers have overbuilt, and Macau isn’t returning the figures Wall Street expected. Cramer’s advice: Cash out.
Cramer also reiterated his sell call on Ambac , PMI Group , MBIA and MGIC Investment .
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