Gambling Stocks vs. Rule #1 vs. Cramer vs. IBD
OK, so I took the Gambling stocks (plus I added LVS) and I added Cramer’s opinion. Two popped up on Investor Business Daily’s IBD 100 list today. And I did a Rule #1 calculation on them using MSN’s Analyst’s five-year EPS projection growth and CURRENT PE ratios (note: using current PE ratios in the calculation may not be the best thing to do). I also looked them up in the MagicFormulaInvesting.com site, but none showed up.
It looks like five stocks are under the Margin of Safety (MOS): They are Century Casinos (CNTY) (if you believe 25% growth!), Las Vegas Sands (LVS) (also 25% growth), The Sands Regent (SNDS) (Hey, also 25%), Shuffle Master (SHFL) (hmmmm, 25%?), and Youbet.com (UBET) (ah come on, 25%?).
Two stocks were ranked in the IBD 100 list: LVS ranked #32 with an EPS rating of 98. PENN ranked 67 with an EPS rating of 98.
| Rule #1 | ||||||||
| Company | Ticker | Current EPS | Est EPS | Est PE | FV | Sticker | MOS | Latest |
| Ameristar Casinos Inc | ASCA | $ 1.16 | 15.0% | $ 21.90 | $ 102.77 | $ 25.40 | $ 12.70 | $ 25.21 |
| Aztar Corporation | AZR | $ 2.02 | 10.6% | $ 22.90 | $ 126.69 | $ 31.32 | $ 15.66 | $ 46.30 |
| Boyd Gaming Corporation | BYD | $ 1.78 | 15.8% | $ 30.10 | $ 232.31 | $ 57.42 | $ 28.71 | $ 53.14 |
| Century Casinos Inc | CNTY | $ 0.25 | 25.0% | $ 42.10 | $ 98.02 | $ 24.23 | $ 12.11 | $ 10.31 |
| Dover Downs Gaming & Entmt Inc | DDE | $ 1.09 | 17.0% | $ 22.20 | $ 116.32 | $ 28.75 | $ 14.38 | $ 24.33 |
| Full House Resorts Inc | FLL | $ 0.06 | 15.0% | $ 57.00 | $ 13.84 | $ 3.42 | $ 1.71 | $ 3.30 |
| Gametech International Inc | GMTC | $ 0.19 | 15.0% | $ 37.90 | $ 29.13 | $ 7.20 | $ 3.60 | $ 7.32 |
| Gaming Partners Intl Corp | GPIC | $ 0.53 | 15.0% | $ 31.90 | $ 68.40 | $ 16.91 | $ 8.45 | $ 16.53 |
| GTECH Holdings Corporation | GTK | $ 1.63 | 13.0% | $ 20.90 | $ 115.64 | $ 28.59 | $ 14.29 | $ 34.10 |
| Harrah’s Entertainment, Inc. | HET | $ 1.57 | 14.0% | $ 51.20 | $ 298.00 | $ 73.66 | $ 36.83 | $ 79.62 |
| International Game Technology | IGT | $ 1.30 | 15.5% | $ 28.40 | $ 155.98 | $ 38.56 | $ 19.28 | $ 37.28 |
| Isle Of Capri Casinos Inc | ISLE | $ 0.26 | 16.7% | $ 130.20 | $ 158.60 | $ 39.20 | $ 19.60 | $ 33.04 |
| Kerzner International Ltd | KZL | $ 1.39 | 18.8% | $ 56.70 | $ 441.33 | $ 109.09 | $ 54.54 | $ 78.95 |
| Las Vegas Sands | LVS | $ 0.80 | 25.0% | $ 80.00 | $ 596.05 | $ 147.33 | $ 73.67 | $ 63.51 |
| MGM Mirage | MGM | $ 1.50 | 16.3% | $ 29.60 | $ 200.99 | $ 49.68 | $ 24.84 | $ 43.55 |
| Monarch Casino & Resort Inc | MCRI | $ 1.10 | 15.0% | $ 28.20 | $ 125.49 | $ 31.02 | $ 15.51 | $ 30.82 |
| MTR Gaming Group Inc | MNTG | $ 0.27 | 15.0% | $ 37.20 | $ 40.63 | $ 10.04 | $ 5.02 | $ 10.10 |
| Multimedia Games, Inc. | MGAM | $ 0.49 | 13.3% | $ 26.80 | $ 45.78 | $ 11.31 | $ 5.66 | $ 13.17 |
| Nevada Gold & Casinos Inc | UWN | $ 0.17 | 20.0% | $ 54.10 | $ 56.95 | $ 14.08 | $ 7.04 | $ 9.30 |
| Penn National Gaming Inc | PENN | $ 1.41 | 18.1% | $ 30.70 | $ 228.48 | $ 56.48 | $ 28.24 | $ 42.60 |
| Pinnacle Entmt Inc | PNK | $ 0.14 | 12.0% | $ 221.20 | $ 96.18 | $ 23.77 | $ 11.89 | $ 29.78 |
| The Sands Regent | SNDS | $ 0.56 | 25.0% | $ 23.20 | $ 121.00 | $ 29.91 | $ 14.95 | $ 13.00 |
| Scientific Games Corp | SGMS | $ 0.81 | 20.8% | $ 47.30 | $ 253.52 | $ 62.67 | $ 31.33 | $ 38.17 |
| Shuffle Master Inc | SHFL | $ 0.84 | 25.0% | $ 42.10 | $ 329.35 | $ 81.41 | $ 40.71 | $ 34.74 |
| Station Casinos, Inc. | STN | $ 2.40 | 15.9% | $ 32.60 | $ 342.19 | $ 84.58 | $ 42.29 | $ 77.37 |
| WMS Industries Inc. | WMS | $ 0.83 | 20.0% | $ 36.80 | $ 189.12 | $ 46.75 | $ 23.37 | $ 30.76 |
| Wynn Resorts Ltd | WYNN | $ (0.92) | 18.3% | — | #VALUE! | #VALUE! | #VALUE! | $ 76.59 |
| Youbet Com Inc | UBET | $ 0.16 | 25.0% | $ 31.10 | $ 46.34 | $ 11.46 | $ 5.73 | $ 5.00 |
Cramer’s picks on the gambling stocks:
| Call | Date | Company | Ticker |
| BEAR | 2/6/2006 | Harrah’s Entertainment, Inc. | HET |
| BULL | 4/6/2006 | International Game Technology | IGT |
| BEAR | 2/8/2006 | Isle Of Capri Casinos Inc | ISLE |
| BULL | 3/27/2006 | Las Vegas Sands | LVS |
| BEAR | 3/22/2006 | Multimedia Games, Inc. | MGAM |
| BULL | 4/1/2006 | Penn National Gaming Inc | PENN |
| BULL | 4/20/2006 | Scientific Games Corp | SGMS |
| BEAR | 12/12/2006 | Shuffle Master Inc | SHFL |
| BULL | 2/6/2006 | Station Casinos, Inc. | STN |
| BEAR | 3/27/2006 | Wynn Resorts Ltd | WYNN |
Full disclosure: I bought some LVS and UBET today.
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comment posted after market close on 4/26:
I wish you wouldn’t buy stocks I already own. It is a guarantee that they are about to decline!
So what are you going to do, buy more or panic?
I owned five of those stocks but I bought them between September and December of 2005. I was not yet exposed to Cramer, and I was looking for “baby boomer” stocks. The sector looked out of favor, and I bought any casino stock with an IBD EPS rank of 80 or more.
I bought BYD at an average cost of $46, LVS at $36, MCRI at $18.22, SHFL at $25.32 and STN at $62.91.
I just sold BYD at $51.18 a week ago Tuesday to raise cash. It had single digit sales growth the last two quarters (They have returned to double digit with their latest report) and they are projecting only single digit earnings for the year.
I will sell STN on the next up move. Their growth is on expectations of some very good properties that they have to develope in the Reno and Las Vegas areas, but that will take a while. I am just not willing to wait.
MCRI just seems to go up. They have good earnings on a developed property in Reno and that is it. I think that most of it due to such a limited number of shares outstanding while the sector is generating interest.With a 70% gain, I may be getting piggish on this one.
LVS is flying on the situation in Macau. There are reports of properties recouping their investment outlay in ten months! Since Macau is Chinese, I think that there is not even a terrorist threat there.
SHFL is moving on Macau news as well. They just got exclusive rights to provide gaming systems to a big developer over there.
If LVS continues to pull back into the weekend, I will buy more on Tuesday.
Panic! I traded completely out of it today. According to Rule #1, when the Moving Average, the Stochastic, and the MACD all move against you, you have to sell. SO I DID.
I’ll just buy it back if I’m proven wrong!