Billionaire Mario Gabelli Says Time Is Right To Buy Casino Stocks, Likes FIZZ, Live Entertainment Stocks

Mario Gabelli is the founder of Gabelli Asset Management Company Investors (GAMCO Investors). The top sectors in his fund are consumer cyclical and industrials. Gabelli who has an estimated net worth of $1.65 billion was ranked 382nd amongst the top 400 wealthiest people in the nation by the Forbes magazine. When asked about active vs passive styles of investing, Mario states that passive investing is for the mindless investors and voters. He also says that it is impossible to gain in a down market by being in an index fund. 

Recently Gabelli was present at the CNBC’s Halftime Report where he discussed about his top picks and mentioned it is a good time to buy casino stocks. More specifically, the investor talked about MGM Resorts International (NYSE:MGM) and Wynn Resorts Limited (NASDAQ:WYNN) saying that these stocks are attractive because Las Vegas is “booming”. In addition, Gabelli discussed Textron Inc. (NYSE:TXT), Herc Holdings Inc (NYSE:HRI), and National Beverage Corp (NASDAQ:FIZZ). He is also bullish about entertainment stocks, saying that “no matter how old you get” you would like to visit concerts. 

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MGM Resorts International (NYSE:MGM) owns and operates casino resorts in USA and China and its  stock is up by more than 15% year-to-date. GAMCO held 99,850 shares of MGM at the end of June, having boosted the position by 46% over the quarter. Gabelli mentioned MGM Resorts International (NYSE:MGM) as one of his top ideas as they recently spun off their real estate business and are “doing some interesting things”. The total number of funds from our database having a position in this stock increased to 59 from 55 during the second quarter. For the second quarter, the company reported EPS of $0.26, beating the estimates by $0.03, while for the third quarter, analysts expect the company to post earnings of $0.67 per share.

In Wynn Resorts Limited (NASDAQ:WYNN), GAMCO owned 111,194 shares at the end of June, being among 30 funds tracked by us that held shares worth $1.72 billion in aggregate, having amassed 18.7% of the company’s float. The stock has rallied by more than 35% since the beginning of the year. Gabelli is bullish on this stock given that its new hotel is coming up in Boston and it also opened Wynn Palace in Macau. He said it is a good time to enter casino stocks as Las Vegas is booming and Wynn Resorts has done a very good job. The new property with its already existing operation Wynn Macau is expected to add up to $1 billion of cash flows. Wynn Resorts Limited (NASDAQ:WYNN)’s stock also has an attractive dividend yield of 2.1%.

On the next page, we are going to discuss three other stocks that Gabelli discussed during his interview on CNBC.

National Beverage Corp (NASDAQ:FIZZ) is engaged in the business of manufacturing and selling flavoured beverage products like sparkling water, drinks, juices for the health conscious. During the interview, Mario Gabelli states that the company’s sparkling water product “La Croix is an attractive product” and he remains bullish on the stock, which should benefit from a “strong tailwind of organic, natural and biotic free” drinks. During the second quarter, GAMCO more than doubled its stake in National Beverage Corp to 53,200 shares. Overall, nine funds tracked by Insider Monkey reported stakes in the company as of the end of June, unchanged over the quarter. The stock has surged by more than 30% year-to-date. 

Eldorado Resorts Inc. (NASDAQ:ERI)’s stock has gained 28% in the last year. GAMCO did not report holding shares of the company in its 13F for the end of June, but Gabelli said that it is another attractive and interesting smaller casino stock and believes it is a “good time to get involved in this company.” This casino entertainment company has a market value of $574 million and entered into a definitive agreement to acquire Isle of Capri casinos in September for a cash and stock transaction worth $1.17 billion. This transaction is not only expected to increase the property base of Eldorado Resorts, but also bring cost synergies of $35 million in the first year itself. A total of 22 funds tracked by us held shares of Eldorado Resorts Inc. (NASDAQ:ERI) at the end of the second quarter, having amassed 23% of its float. 

Madison Square Garden Co (NYSE:MSG) operates in the sports and entertainment industry. The company has two primary segments – the sports segment owns major USA sports franchises such as the New York Knicks, while the entertainment segment organizes live entertainment shows such as concerts and theatre shows. Mario Gabelli thinks MSG will gain because the company has video rights to many sports franchisees like the New York Knicks of the National Basketball Association and the New York Rangers. GAMCO reported ownership of  930,735 shares of Madison Square Garden Co (NYSE:MSG) as of the end of the end of June. 

Disclosure: None