Wynn Resorts Is a Winning Investment

Casino giant Wynn Resorts (WYNN) was in a downtrend over the last few years. However, the company has recently turned its fortunes around and is up 100% from its 52-week lows. The company gained huge advantages from the growth in the Asian gaming capital of Macau, turning that market even more significant to the resort’s success than its landmark properties on the Las Vegas Strip.

In July 2016, Wynn Resorts reported strong second quarter results. In Q2FY16, the company shared earnings per share of $1.07, $0.16 better than the estimates.
On the other hand, the company’s revenue came in at $1.06 billion, $40 million greater than the estimates and a surge of $1.9 percent y-o-y.

Moving onward, one month before, the company inaugurated its new Wynn Palace, finally completing a project that took almost six years to accomplish and cost over $4 billion. However, Wynn Palace has numerous potential positive influences on Wynn Resorts.

This new palace has twice the Wynn’s hotel-room count in Macau, offering it prime exposure to a jump in the gaming market there if it comes in the near future. Most significantly, it looks like this new palace is well poised to strike a superior balance amid appealing a mass audience and providing to higher-end gamblers, with plea to the mass market having become more essential recently.

On the other hand, with China searching a way to clear-out alleged VIP gaming, it has become necessary for Wynn Palace to diversify its customer base away from that high-roller set.
Wynn Resorts Is a Winning Investment
Image by jaygeorge / Pixabay
Furthermore, Wynn Palace definitely has amenities that still appeal to VIPs, but by building a strong presence on the famous Cotai Strip area of Macau, Wynn itself can gain complete advantage of any retrieval there.

Apart from this, Wynn Palace also needs to demonstrate that it can get customers to spend a considerable amount of money off the casino floor. All in all, the company’s prospects look bright and despite the strong rally in the last few months, I believe the stock has still not peaked.

Conclusion

Wynn Resorts is up 100% from 52-week low levels, but the company is still growing and has several positive developments for the short as well as the long-term. Despite the recent rally, I think Wynn Resorts has more upside to offer to investors, which is why I think the stock is a good buy at the current price.
Published on Sep 30, 2016
By Akshansh Gandhi

Copyrighted 2016. Content published with author's permission.

Posted in ...