In light of major resort and casino destination Las Vegas opening on Thursday a brand new megaresort on the Strip, five resort and casino stocks broadly owned by gurus as of the March-quarter filing are Las Vegas Sands Corp. (LVS, Financial), MGM Resorts International (MGM, Financial), Caesars Entertainment Inc. (CZR, Financial), Red Rock Resorts Inc. (RRR, Financial) and Wynn Resorts Ltd. (WYNN, Financial) according to the Aggregated Portfolio of Gurus, a Premium feature of GuruFocus.
Las Vegas debuts Resorts World as city returns to 100% capacity
Nevada Governor Steve Sisolak said in April that he expected every county in the state to fully reopen by June 1. Las Vegas announced on June 1 a full-reopening of its hotels, resorts and casinos as properties and businesses ease coronavirus restrictions for fully-vaccinated Americans. As of Thursday, 43% of Nevadans are fully vaccinated while 51% of the population received at least one Covid-19 vaccine dose according to the state health department.
Resorts World, operated by Malaysia-based Genting Bhd (XKLS:3182, Financial), opened its Las Vegas resort at 11 p.m. Pacific Time on Thursday. According to CNBC, Scott Sibella, president of Resorts World Las Vegas, said that the resort is “optimistic that things would be better,” further saying that management is excited to be part of Las Vegas’ return to full capacity.
GuruFocus’ Most Broadly Held model portfolio continues outperforming benchmark
According to the GuruFocus Model Portfolios page, the Most Broadly Held model portfolio has returned 17% in the year to date, outperforming the Standard & Poor’s 500 index benchmark return of 12.93% in the same period. The model portfolio has returned a cumulative 469.32% since inception in 2006.
As such, investors may wish to consider resorts and casino stocks that are broadly held by gurus. GuruFocus’ Aggregated Portfolio of Gurus listed several stocks with at least six gurus owning shares as of the March filing date.
Las Vegas Sands
Sixteen gurus own shares of Las Vegas Sands (LVS, Financial) with a combined weight of 5.39%.
Las Vegas Sands CEO Robert Goldstein said in the company’s March-quarter earnings press release that while the company “remains confident in the eventual recovery in travel and tourism spending” across its business segments, pandemic-related travel restrictions continue hindering visitation and earnings performance.
GuruFocus ranks the company’s financial strength 3 out of 10 on several warning signs, which include a low Piotroski F-score of 3 and a cash-to-debt ratio that underperforms more than 70% of global competitors.
Gurus with large holdings in Las Vegas Sands include the T Rowe Price Equity Income Fund (Trades, Portfolio) and Sarah Ketterer (Trades, Portfolio).
MGM Resorts
Twelve gurus own shares of MGM Resorts (MGM, Financial) with a combined weight of 8.57%.
MGM Resorts CEO Bill Hornbuckle said that the company’s regional properties achieved record first quarter adjusted property earnings before interest, taxes, depreciation, amortization and rental costs and Ebitdar margins even though property closures continued hampering revenues and earnings performance.
GuruFocus ranks MGM’s financial strength 3 out of 10 on several warning signs, which include a weak Altman Z-score of 0.69 and a debt-to-equity ratio that underperforms more than 80% of global competitors. Despite this, MGM has a satisfactory Piotroski F-score of 4 and a cash-to-debt ratio that underperforms just 59% of global travel and leisure companies.
Gurus with large holdings in MGM Resorts include Bill Nygren (Trades, Portfolio)’s Oakmark Funds and Mason Hawkins (Trades, Portfolio)’ Southeastern Asset Management.
Caesars Entertainment
Seven gurus own shares of Caesars Entertainment (CZR, Financial) with a combined weight of 1.53%.
GuruFocus ranks the company’s profitability 6 out of 10: Even though the company’s net margins and returns underperform more than 70% of global competitors, Caesars’ operating margin of 4.38% and three-year revenue growth rate of 7.1% outperforms over 68% of global travel and leisure companies.
Red Rock Resorts
Six gurus own shares of Red Rock Resorts (RRR, Financial) with a combined weight of 1.48%.
GuruFocus ranks the company’s profitability 6 out of 10 on the back of an operating margin and three-year revenue growth rate that outperform more than 80% of global competitors despite returns on assets and three-year Ebitda growth rates outperforming just over half of global travel and leisure companies.
Wynn Resorts
Six gurus own shares of Wynn Resorts (WYNN, Financial) with a combined weight of 0.31%.
Wynn CEO Matt Maddox said that while the company’s operating revenues and earnings declined as the pandemic hindered operations, Wynn’s first-quarter results “reflect continued progress” as consumers resume traveling to their “favorite leisure and gaming destinations.”
Ron Baron (Trades, Portfolio)’s Baron Funds has a position in Wynn Resorts.
