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Casino stocks see a big win—and the best could still be ahead

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Trading Nation: Big win for casino stocks

Casino stocks surged Thursday after better-than-expected revenue numbers out of Macau, a special administrative region of China that's become a gambling mecca. And some strategists say it isn't time for investors to cash in their chips just yet.

Las Vegas Sands is now up 16 percent year to date, MGM Resorts has risen 12 percent and Wynn Resorts has climbed 54 percent. In fact, Wynn is the third-best-performing stock in the this year. On Thursday, Las Vegas Sands saw its biggest rise since the first day of September.

Even after the great run, "we do not see any sign of a trend change at this juncture," Piper Jaffray technical analyst Craig Johnson wrote to CNBC.

"I still think there's 20 percent more upside, so I'd still be buying these names at this point," Johnson said Thursday on CNBC's "Power Lunch." "The charts still look good."

For the month of May, Macau authorities reported gross gaming revenue that rose by 24 percent versus the prior year.

The second quarter is "off to an encouraging start for Macau's gaming operators," Stifel Nicolaus analyst Steven Wieczynski wrote in a Thursday note to clients. "Although we sense a resurgence in VIP play continues to support reported marketwide statistics, we believe the mass market growth story continues to unfold according to plan as well, as supported by marketwide visitation and lodging metric data."

This all represents a rather substantial turnaround. In recent years, Macau revenues sank and dragged down the casino operators with them, as a Chinese corruption crackdown caused big problems for the VIP player market.

Beyond the gaming comeback, Boris Schlossberg of BK Asset Management noted that the meeting and convention business in Macau appears to be heating up.

"If they can make Macau a destination, like it looks like it's going to be, that could really [help it to] weather a lot of economic flaws in China," Schlossberg said Thursday on "Power Lunch." "I think that's really a strong story there."