Casino shares are in full swing this week.
Las Vegas Sands, Wynn, Caesars, Penn National Gaming and MGM Resorts have risen in recent days, gaining momentum on Tuesday after Macau betting destination eased restrictions on visitors from mainland China.
This group has been incredibly volatile for the past 18 months, has been hard hit by closures and then disruption and uneven traffic during the coronavirus pandemic.
So is Lady Luck finally on the side of the casinos?
Quint Tatro, president of Joule Financial, says yes … for an action.
“The easy game is Las Vegas Sands,” Tatro told CNBC’s “Trading Nation” on Tuesday. “It was in March of this year that we were here talking about his sudden change and the sale of all of his properties in Las Vegas to basically double down and focus on his exposure in Asia. At that time, I think that was a big question mark. “
The benefits of this strategy now make more sense to Tatro in light of China’s reopening and Macau’s rebound. Las Vegas Sands announced in the first quarter that it would sell its properties in Las Vegas, including its Venetian Resort for a total of $ 6.25 million.
“It still has a tough balance sheet, it’s not the biggest balance sheet, but now they have $ 2 billion in unrestricted cash that they can put where they see the best opportunity,” Tatro said. “If that [rebound] it’s legitimate and we’re starting to resurface in the casino space, I think Las Vegas Sands is the game here. “
Las Vegas Sands has fallen 36% since the March high. It has dropped 28% a year.
JC O’Hara, chief market technician at MKM Partners, said the recession of the names of exposed casinos in China distrusts him. Instead, he prefers DraftKings, a betting park that seems to have stabilized after his setback.
“It’s recovering on an upward trend, falling back above the 150-day moving average. So instead of trying to pick some of these names and make calls about economic data, let’s see where the stock of pricing is positive and that’s DraftKings ”. he said during the same interview.
O’Hara points to March highs above $ 74 as a promising target price and sees a support band at $ 50. DraftKings closed Tuesday at $ 56.47.
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