“Mad Money” host Jim Cramer loves to invest in gambling since, in the long-run, the house always wins and he has two names on his buy list—WynnResorts and Las Vegas Sands. However, one stock stands out right now.
“I’ve always held that Wynn is the superior company; it has a stronger long-term story with fabulous management and unparalleled execution,” Cramer said. “However, right now, Las Vegas Sands is the superior stock.”
The reason is what’s going on in Asia, he said.
Both companies get more than 75 percent of their earnings before interest, taxes, depreciation and amortization from Asia. A big chunk of that comes from Macau, the world’s largest gambling destination and the only city in China where gambling is legal.
But LVS has an “incredible catalyst” in the form of two new properties opening on the Cotai Strip, a massive project in Macau modeled after the Las Vegas strip. While Wynn is a “fabulous company” with “better management,” its Cotai properties won’t open until at least 2014.
Plus, Las Vegas Sands is the largest and most diversified gaming company in Macau and it is only one of two companies licensed to operate casinos in Singapore, where it has a resort.
(Related: Online Gambling Exec Bets on Legalization)
The company was downgraded to ‘neutral’ from ‘buy’ Thursday by Janney Montgomery, and that sent shares tumbling. But for Cramer, that downgrade could be a lucky break.
“Even though I like Wynn more over the long-term, I have no doubt that 2012 will be a better year, relatively and comparatively, for Las Vegas Sands,” Cramer said, “and [Thursday’s] downgrade gives you an opportunity that, frankly, you’ve gotta start thinking about.”