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Buy Wynn. It's No Mirage

Not all casino stocks are created equal. Some are a whole lot more equal than others, to paraphrase the late, great stock seer George Orwell. But the market treats all the gaming stocks as if they're the same, and that's just not right, Cramer said Monday.

Take the case with MGM Mirage . Last Wednesday they preannounced ugly, disappointing first quarter guidance, with most of the shortfall coming from weakness at its Strip and CityCenter properties in Las Vegas. As a result, MGM's stock took a 6 percent hit.

"That makes sense, but Wynn's stock was also down, Cramer said. "What a classic buying opportunity because this coming Wednesday, Wynn is opening what might be its most profitable Casino ever, the Encore in Macau, so you are getting this stock well below where it would be without the bad news from competitor MGM."

Most of the problems at MGM Mirage are either company-specific issues or Vegas-specific, Cramer noted. So what's bad for MGM isn't necessarily bad for Wynn.

"MGM is by far the dominant player on the Las Vegas Strip, and right now those properties...are not doing well," Cramer said.

Revenue per available room on the strip — a key metric in the lodging business — decreased by 8 percent in the first quarter of 2010, and total casino revenue is expected to be 5 percent lower than last year, with slots revenue down 1 percent per quarter.

In short, Vegas is hurting, and MGM, as the premier Vegas play, is hurting, too.

"Wynn, on the other hand, is now mostly a play on Macau, the only place in China where gambling is legal," Cramer said. Wynn, with a terrific balance sheet versus MGM, should never have been down off MGM's negative preannouncement, he said.

"That's because while Wynn does have two hotels in Vegas, it has more exposure to Macau, which is generating billions of dollars in revenue for Wynn's casino there, and represents 63 percent of Wynn's revenues, while Vegas makes up just 37 percent," Cramer noted.

MGM has some Macau exposure, too, with the MGM Grand Macau, but it only has a 50 percent stake in that casino, which makes up just 10 percent of MGM's square footage.

And Wynn is about to open its second Macau property, the Encore at Wynn Macau on April 21, which Steve Wynn, the CEO, claims is the most beautiful property he has ever built.

"Now, Wynn has already given us more than a double since I told you [to buy it] on July 21 of 2009 at 39.77, giving you a 108 percent gain — I'm telling you this stock has room to run," Cramer said. "This is a company that caters to the high-end consumer, to VIPs in the language of the gaming business, and that will be even more true when Encore opens in Macau this week, something that I think will cause analysts to upgrade or reiterate their Wynn buys.

"You just cannot lump this stock in with the likes of MGM," he continued. "It's got better properties, better numbers, better management, better everything."

Call Cramer: 1-800-743-CNBC

Questions for Cramer? madmoney@cnbc.com

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WYNN
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