In this piece we will take a look at the ten best Las Vegas stocks to buy now. If you want to skip our industry introduction and jump ahead to the top five stocks in this list, then take a look at 5 Best Las Vegas Stocks To Buy Now.
One of the largest industries that was disrupted due to the coronavirus pandemic was the hospitality and travel industry as lockdowns eliminated the foot traffic and forced companies to shut down their resorts. With the pandemic now behind us, and the U.S. economy continuing to exhibit mixed signals, the time might be just right for this segment to recover.
A major segment of the hospitality industry is casinos, and they are among some of the most popular entertainment ventures globally in countries that have not outlawed gambling. Given the large amount of money spent by consumers on gambling, several market research reports paint an optimistic picture for the sector as well.
For instance, Global Industry Analysts estimates that despite the coronavirus disruption, the global casino market will be worth $129 billion by the end of this year, and from then to 2026, it will grow at a compounded annual growth rate of 3.7% to stand at $153 billion as 2026 comes to an end. Out of the entire market, the gambling machines subsegment will have the strongest CAGR of 4.1% to touch $77 billion as 2023 ends – and represent the largest chunk of the casino sector.
Likewise, Market Research Future also has a similar view but with widely larger estimates. This firm believes that the global casino market will grow at a strong 7.32% to be worth a whopping $503 billion by the end of this decade.
Therefore, it’s clear that the future does hold some promise for the casino sector, but what if we zoom into the present? The 2022 economic downturn, fueled by the Russian invasion of Ukraine, has shattered stock markets and worried investors. However, strong labor data and spending have made some investors optimistic about recovery, and over the previous month, major stock market indexes have picked up.
Indexes such as the New York Stock Exchange and the Dow Jones Industrial Average have appreciated by 6% and 5% over the past month. In comparison, Dow Jones U.S. Gambling Index has appreciated by a whopping 22% over the same time period, indicating that those prudent investors who were savvy enough to have invested in it would have outperformed some of the more popular markets out there.
With these details in mind, it’s time to take a look at some of the top Las Vegas stocks out there, and some of the more impressive names that might pique your attention include Caesars Entertainment, Inc. (NASDAQ:CZR), MGM Resorts International (NYSE:MGM), and Boyd Gaming Corporation (NYSE:BYD).
Our Methodology
We picked casino and gambling stocks with long-term growth prospects and strong fundamentals. Wall Street analysts are also upbeat about these stocks and they are also popular among the 900 hedge funds tracked by Insider Monkey as of the end of the first quarter.
10 Best Las Vegas Stocks To Buy Now
10. Monarch Casino & Resort, Inc. (NASDAQ:MCRI)
Number of Hedge Fund Holders: 18
Monarch Casino & Resort, Inc. (NASDAQ:MCRI) owns casinos and resorts in Nevada and Colorado. The company has thousands of square feet of casino space and slot machines in its portfolio, and it is headquartered in Reno, Nevada.
An intrinsic value analysis of Monarch Casino & Resort, Inc. (NASDAQ:MCRI)’s share price suggests that its fair value at the end of the next five years stands at $93.8 per share, for a significant upside over the current share price of $64.4. Additionally, the population growth rates of the two cities in which it operates are double the national average and residents have an average income of $83,000 per year – both of which are strong indicators for the company. Finally, more than 30% of the company’s shares are held by an influential family, which then increases the pressure on management to make good decisions.
18 out of the 912 hedge funds polled by Insider Monkey during this year’s first quarter had owned the company’s shares.
Monarch Casino & Resort, Inc. (NASDAQ:MCRI)’s largest investor in our list is Bryant Regan’s Lafitte Capital Management which owns 359,598 shares that are worth $31 million.
Along with MGM Resorts International (NYSE:MGM), Caesars Entertainment, Inc. (NASDAQ:CZR), and Boyd Gaming Corporation (NYSE:BYD), Monarch Casino & Resort, Inc. (NASDAQ:MCRI) is a hot Las Vegas stock.
9. Golden Entertainment, Inc. (NASDAQ:GDEN)
Number of Hedge Fund Holders: 21
Golden Entertainment, Inc. (NASDAQ:GDEN) owns several different kinds of casinos, resorts, and gaming businesses in the United States. The firm has venues, amenities, resorts, casinos, and food outlets in Nevada and Maryland. It is headquartered in Las Vegas, Nevada.
Golden Entertainment, Inc. (NASDAQ:GDEN) had a return on assets (ROA) of 7.55%, a return on equity (ROE) of 51%, and a revenue growth rate of 31% over the past five years. JMP Securities set a $63 share price target for the company alongside an Outperform rating in July 2022, as it shared that it is well diversified with a strong cash flow and market population growth. 21 of the 912 hedge funds polled by Insider Monkey during Q1 2022 had held a stake in the company.
Golden Entertainment, Inc. (NASDAQ:GDEN)’s largest investor is Richard Driehaus’s Driehaus Capital which owns 1.2 million shares that are worth $71 million.
8. Bally’s Corporation (NYSE:BALY)
Number of Hedge Fund Holders: 24
Bally’s Corporation (NYSE:BALY) is an American gaming, hospitality, and entertainment company that has casinos, hotels, and racetracks all over the country. These include a horse racetrack in ten states, casinos in Rhode Island, Delaware, Atlantic City, and more.
Bally’s Corporation (NYSE:BALY) won a major bid for a casino in Chicago, Illinois for $1.5 billion earlier this year, further allowing the company to expand its footprint. The company is targeting an $800 million revenue footprint from the property, translating into a $2 million per day average casino win. It also plans to create an omnichannel business model, where people place bets online.
Cowen kept an Outperform rating on Bally’s Corporation (NYSE:BALY)’s shares in August 2022 but reduced its share price target to $45 from $53. Insider Monkey scanned 912 hedge funds for this year’s March quarter to find out that 24 had bought the company’s shares.
7. Hilton Grand Vacations Inc. (NYSE:HGV)
Number of Hedge Fund Holders: 27
Hilton Grand Vacations Inc. (NYSE:HGV) is a vacation and resort provider that is headquartered in Orlando, Florida, United States. The company is known for its Hilton Grand Vacations Club on the Las Vegas strip and it has more than 300,000 members who avail its reservation, membership, and other services.
Hilton Grand Vacations Inc. (NYSE:HGV) is the leading vacation ownership company in America, a title it cemented by acquiring another company earlier this year with the deal estimated to provide it with $125 million in run rate synergies for the next two years. Plus, the company is on an upward trajectory, as it grew its operating revenue by 162% annually during its latest quarter, for a strong recovery.
Barclays set a $50 price target and an Overweight rating for Hilton Grand Vacations Inc. (NYSE:HGV)’s shares in August 2022, as it stated that the company will hold well against the current challenging environment. Of the 912 hedge funds profiled by Insider Monkey for this year’s first quarter, 27 had held a stake in the company.
Hilton Grand Vacations Inc. (NYSE:HGV)’s largest investor is Clifford A. Sosin’s CAS Investment Partners which owns 7 million shares that are worth $401 million.
6. Red Rock Resorts, Inc. (NASDAQ:RRR)
Number of Hedge Fund Holders: 28
Red Rock Resorts, Inc. (NASDAQ:RRR) is a major Las Vegas casino and entertainment company, as it has nine larger facilities and 10 casinos in the area. Additionally, the firm also has a resort and casino in California. It is headquartered in Las Vegas, Nevada, United States.
Honing in on the company’s largest market Nevada, government data shows that unemployment in the region is nearing pre-pandemic levels, which in turn provides an opportunity for an uptick for Red Rock Resorts, Inc. (NASDAQ:RRR)’s fortunes. Additionally, the company has also recovered its margins and has been consistently posting higher EBITDA and gross margins for the last three quarters. Finally, research firm Hedgeye named Red Rock Resorts, Inc. (NASDAQ:RRR) as its best long pick in July 2022, citing strong casino earnings despite a downturn and sharing that the firm’s core consumers have plenty of money to spend and are concentrated around its facilities.
Perhaps these points were also on Deutsche Bank’s mind as it raised Red Rock Resorts, Inc. (NASDAQ:RRR)’s share price target to $50 from $45 in August 2022. Insider Monkey profiled 912 hedge funds during this year’s first quarter and discovered that 28 had bought the company’s shares.
Red Rock Resorts, Inc. (NASDAQ:RRR)’s largest investor is Ric Dillon’s Diamond Hill Capital which owns 5 million shares that are worth $249 million.
The same firm mentioned Red Rock Resorts, Inc. (NASDAQ:RRR) in its Q1 2022 investor letter and outlined that:
“Red Rock Resorts’ stock took a breather in Q1—following an extremely strong 2021 return—as Omicron concerns and inflationary risks related to the company’s Durango development weighed on investors’ minds.”
Red Rock Resorts, Inc. (NASDAQ:RRR) joins Caesars Entertainment, Inc. (NASDAQ:CZR), MGM Resorts International (NYSE:MGM), and Boyd Gaming Corporation (NYSE:BYD) in our list of best Las Vegas stocks.
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Disclosure. None. 10 Best Las Vegas Stocks To Buy Now is originally published on Insider Monkey.
