Having Surged In The Past Week, Are Casino Stocks A Good Buy Now?

According to our data, the smart money is bullish on Wynn Resorts, Limited (NASDAQ:WYNN), which trades at a forward P/E of 17.42 and pays a dividend yield of 2.63%. Of the 730 elite funds we track, 35 funds owned $1.24 billion of Wynn Resorts, representing 12.40% of the float, at the end of the second quarter, up from 25 funds holding stakes worth $936.81 million a quarter earlier. Mason Hawkins‘ Southeastern Asset Management owned 7.11 million shares at the end of the second quarter, up by 56% from the prior quarter.

Hedge funds are less optimistic about Las Vegas Sands Corp. (NYSE:LVS), as nine funds held stakes in the company with an aggregate value of $265.44 million, equal to just 0.60% of the company at the end of June. This is down from 24 funds with holdings valued at $390.17 million on March 31. Matthew Hulsizer‘s PEAK6 Capital Management upped its ‘Put’ position by 178% to hold options underlying 1.51 million shares, while also increasing its ‘Call’ position by 157% to cover 1.29 million underlying shares in the second quarter. Las Vegas Sands pays a 5.5% dividend yield and trades at a forward P/E of 18.

The smart money kept its position in MGM Resorts International (NYSE:MGM) stable in the second quarter. The number of funds long the stock was stable at 58 from the prior quarter , while the total value of the funds’ holdings in MGM declined slightly to $1.74 billion worth of the company’s shares (representing 16.90% of the float) from $1.76 billion at the end of the first quarter. Daniel Och‘s OZ Management raised its holding by 51% to 11.22 million shares. MGM trades at a forward P/E of 36.6.

We think Las Vegas Sands is the strongest of the three companies and is a buy, while we would stay on the sidelines for Wynn Resorts and MGM. The smart money thinks the rally in Wynn Resorts can continue, although if Wynn surges due to industry news, the three casino stocks will likely soar together.

Disclosure: None