With the economy on an upward trend, it could be time to buy gaming stocks again.
The gaming sector suffered a dip during the last recession. However, with the economy seeing impressive growth over the last few quarters, the chances that the gaming industry will pick up again are high.
Reuters reported last year that the improvement in economic activities such as construction and healthcare in Vegas has increased the number of people who go to Vegas. This increases the number of people who go to casinos. Moreover, an improving economy could also mean that people now have more money at hand and as such, can now afford the luxury of gambling.
Here are five gaming stocks that analysts love, according to data provided by Thompson Reuters and FactSet through MarketWatch.
MGM Resorts International (NYSE:MGM)
Las Vegas-based MGM Resorts International operates casinos in the U.S. and in Macau and has a market cap of $10 billion.
Seventeen analysts currently rate MGM a "buy," while five analysts have a "hold" rating. The company currently has no analyst rating it a "sell." The rating has stayed steady over the past three months.
A notable recent analyst update came from Union Gaming Research. Analysts at the firm initiated coverage on MGM -- and some other Macau gaming stocks -- with a "buy" rating, saying that, while the operational gross gaming revenue hasn't bottomed yet, Macau stocks have bottomed and thus, it's time for investors to get in.
Melco Crown Entertainment Limited (NASDAQ:MPEL)
Macau gaming company Melco Crown Entertainment is a developer, owner and operator of casino gaming and entertainment resort facilities in Asia. It has a market cap of nearly $14 billion.
Fourteen analysts currently rate Melco Crown a "buy," while eleven analysts have a "hold" rating for Melco Crown. As of three months ago, 18 analysts had a "buy" rating on Melco Crown, while eight analysts rated it a "hold". The gaming company doesn't have any analyst advising its sale neither as of the time of writing, nor three months ago.
Melco Crown was also one of the Macau stocks that analysts at Union Gaming rated a "buy", arguing that the stock has already bottomed - as explained in the case of MGM above.
Wynn Resorts Ltd. (NASDAQ:WYNN)
Based out of Las Vegas, Wynn Resorts develops, owns and operates destination casino resorts in the U.S. and in Macau. It has a market cap of about $15.7 billion.
Twelve analysts currently rate Wynn Resorts a "buy," while nine analysts rate the stock a"hold." Wynn doesn't have any "sell" ratings.
Wynn was also one of the Macau stocks that Union Gaming covered in its recent report. However, since Union Gaming initiated coverage on the stock with a buy, analysts at Morningstar have downgraded the stock to a "hold."
Las Vegas Sands Corp. (NYSE: NYSE:LVS)
Las Vegas Sands is a Las Vegas-based gaming company that operates integrated resorts in U.S. and Asia. It currently has a market cap of $46 billion.
Eleven analysts currently rate Las Vegas Sands a "buy," while seven rate it a "hold." This is quite underwhelming considering that, as of three months ago, there were fifteen analysts who rated Las Vegas Sands a "buy," while seven had a "hold" rating for it. The company doesn't have any analysts who rate it a "sell."
The recent Union Gaming report also rates Las Vegas Sands a "buy." Since then, Stifel Nicolaus has also issued a report in which it lowered its price target for the stock, while still maintaining its "buy" rating.
Penn National Gaming Inc. (NASDAQ:PENN)
Based out of Wyomissing, Pa., Penn National Gaming owns and manages gaming properties across the U.S. It has a market cap of about $1.3 billion.
Seven analysts currently rate Penn a "buy," while five analysts rate the company a "hold." One analyst currently rates Penn a "sell," while two analysts rated it a "sell" three months ago.
Despite the sell rating, however, it seems analysts are generally bullish on this company, with most rating updates over the last three months coming with a raise in price target.