Las Vegas Sands Corp. (LVS), International Game Technology (IGT): A Better Way To Play The Gaming Industry

Alternatives: Casino Operators

The other way to play the gaming sector is to buy a casino stock directly, such as Wynn Resorts, Limited (NASDAQ:WYNN) or Las Vegas Sands. Las Vegas Sands Corp. (NYSE:LVS) is a very large company with casinos in Las Vegas, Macau, Pennsylvania, and Singapore. As I alluded to in the introduction, the company got hit extremely hard by the financial crisis and traded for as low as $1.38 in 2009 (it is currently just under $60).

This is a very risky play, in my opinion, based on the company’s aggressive Asian expansion plans. It is simply too expensive at 29 times earnings to justify the risk, when in a best case scenario the company hopes to grow at a 15% annual rate.

Wynn, on the other hand, is several times smaller, and operates some of the most upscale casinos in Las Vegas and Macau. They plan on expanding further in Macau, having planned a $4 billion project to open in 2016, which in my opinion may be biting off more than they can chew. A casino venture of this size will need to be very successful in order to be sufficiently profitable, and I just see it as an unnecessary risk. At 24.9 times earnings, it is a bit cheaper than Las Vegas Sands, but still too expensive for the amount of growth it “could” deliver.

The Only Option Here…

In the gaming industry today, I sincerely believe International Game Technology is the only responsible way to play the sector as a long term, serious investment. While Wynn could very well make its shareholders rich, it could just as easily plummet if Chinese gamblers aren’t drawn to their huge undertaking there as much as predicted. The valuation is right, the demand is right, and I think the timing is right to take a long hard look at International Game Technology (NYSE:IGT).

The article A Better Way To Play The Gaming Industry originally appeared on Fool.com and is written by Matthew Frankel.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

10 Top Reasons For Getting Fired

The 3 Best States to Start an LLC

10 Jobs That Allow You to Travel

7 High-Paying Jobs You Can Do From Home

12 Best Cities to Shop in USA

10 Best States To Practice Medicine

The 10 Best States to Have a Business

The 12 Most Expensive Apple (AAPL) Apps in the Market

The 10 Richest Billionaires in the World

10 Biggest Kickstarter Failures

The 10 Best Places to Work At

The Top 10 of Google Inc (GOOGL)’s Most Expensive Acquisitions

13 Best Cities to Visit in South America

10 Most Expensive Works of Art of All Time

The 10 Richest Banks in the World

The 10 Best-Paying Jobs in America (2014)

7 Most Expensive Foods in the World

The World’s Top 10 Earning Authors

Five Wicked and Very Expensive Items (and Other “Stuff”) Sold on eBay

10 Biggest Celebrity Bankruptcies

The Top 10 Highest Paid CEOs in 2014

The 10 Most Expensive Real Estate Cities in America

10 Most Expensive States To Live In America

The 10 Best Airlines in the World

The 10 Best-Selling Cars in 2014

The 10 Best Industries to Invest In

The 10 Most Expensive States to Own a Car In

Top 10 Business Schools in US: 2014 Rankings

Top 20 Female Billionaires in 2014

6 Movies That You Should Watch to Better Understand The Cold War

Top 15 Best Paying Jobs for Women in 2014

Top 6 Things Rich People Do Differently Every Day

5 Retirement Mistakes To Avoid (and Einstein’s Famous Quote)

11 Smartest People in the World

6 Films About the Financial World You Need To Watch (While “The Wolf” is Not Around)

Warren Buffett and Billionaires Are Crazy About These 7 Stocks

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!