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One of the most widely held stocks in the contest is Las Vegas Sands Corp (LVS), the gaming company that runs casinos and hotels worldwide. It has experienced a nice run higher in the past couple of days as reports that the New Years business in Las Vegas was better than expected, and that the cheaper room rates seem to have helped draw people in. Two other stocks in that industry, WYNN and MGM are also rallying. The weak economy crushed these stocks in 2008, as investors figured that people wouldn’t have the discretionary income to enjoy Sin City. And that concern is justified going into 2009. But if the economy does improve, then these stocks may benefit. These companies are also global, with significant interests in Macau. If China eases some of the visa restrictions on its citizens who want to visit Macau, that could drive a lot of business to casinos there. Both those bullish influences are likely longer-term, and may have a time-frame that reaches beyond the end of the contest. But the stocks are very volatile and have the potential for large price moves, both up and down, in the short term. There has been some heavy call option volume in those three stocks, particularly in WYNN, where call volume is 7x the last 5 day average. That’s not to say that “smart money” (if there is such a thing any more) is bullish on WYNN, but it would suggest that there is growing speculative interest in that and other gaming stocks.
Tom Preston
thinkorswim, Inc.
Member FINRA/SIPC/NFA
thinkorswim, Inc. and its registered employee, Tom Preston, do not solicit or recommend any form of trading in the individual stocks (or their derivatives) mentioned above. Please do careful, independent research before investing any money as well as weigh the possible consequences on your particular financial situation before doing so. The risk of loss may be substantial.
