In the wake of last year’s spectacular performance by most casino stocks, the sector’s bulls are running like they’re in Pamplona, while casino bears are cautiously pacing the sidelines.  Who’s right? Well, that depends on timing — and trends.

Last year’s biggest winners were casino stocks that had strong exposure to Macau. The former Portuguese colony, which is administered by the People’s Republic of China, has run wild in the past three years — and casino stocks with high-end properties in Macau have raked in revenue hand over fist. Indeed, Macau’s Statistics and Census Bureau on Monday reported that the economy rose by nearly 12% in 2013 — driven in large part by a 18.6% rise in gaming.

While that growth rate is a far cry from the 35% delivered back in 2011, it is more sustainable — an important consideration for investors. Macau is expected to surpass $40 billion in gross gaming revenue in 2014, according to independent research firm Spectrum Gaming Group.

Spectrum identified several trends that could have a profound impact for casino stocks in 2014 — two of which make sense to highlight here: First, gaming has expanded dramatically in the U.S. in the past 10 years, resulting in market saturation in many regions of the country. The heat is on U.S. casino operators to grow their business organically since there are fewer opportunities to simply lure business from neighboring states.

Second, market saturation fears in the U.S. will likely spook lenders, who may tighten underwriting standards for casino companies that already are highly leveraged. Given that insight on the gaming sector, here are two casino stocks to hold and two to fold:

Hold: Melco Crown Entertainment (MPEL)

Among casino stocks, Hong Kong-based Melco Crown Entertainment (MPEL) is the closest thing to a pure-play on Macau. MPEL stock has gained more than 100% in the past year and appears poised to hit even greater heights in 2014.

Among its premier properties is MPEL’s City of Dreams, an integrated casino resort on the lucrative Cotai Strip that has 450 gaming tables and 1,400 gaming machines. it also is developing the Studio City Project, a cinematically-themed integrated resort also in Cotai. Last month, MPEL’s fourth-quarter earnings beat the Street on the top and bottom lines, reporting profit of 40 cents per share on revenue of $1.4 billion. Analysts had expected an EPS of 38 cents on $1.36 billion in revenue.

But the bears weren’t impressed: MPEL stock has recently endured some turbulence — its beta is a whopping 2.7, indicating it is nearly three times more volatile than the broader market. With MPEL stock down more than 8% since March 5, however, this might prove a good entry point for investors looking for casino stocks that provide exposure to Macau.

MPEL stock has a price-to-earnings-growth (PEG) ratio of only 0.5, indicating that it is extremely undervalued. And the new dividend policy further sweetens the pot for MPEL stock.

Hold: Wynn Resorts Ltd. (WYNN)

Wynn Resorts’ (WYNN) business operations focus primarily on two segments: Macau and Las Vegas. The company operates Wynn Macau and Encore at its resort in Macau and Wynn Las Vegas and Encore at Wynn’s Las Vegas resort.

While bears fretted that a slowdown in VIP gamers from mainland China could adversely impact earnings, a surge in mass-market gaming more than compensated: WYNN’s fourth quarter earnings surged by more than 90%.

In recognition of this high-potential segment, Wynn Resorts’ Chairman Steve Wynn in January named company COO Gamal Aziz as president of Wynn Macau, a high-roller-friendly facility that boasts a Sky Casino. The company also is betting big on its new $4 billion Wynn Palace casino resort on the Cotai Strip, which is scheduled to open in the first quarter of 2016.

WYNN stock is up more than 90% over the past year, although the stock has slipped about 6% this month. WYNN stock has a PEG ratio of nearly 2.4, which looks pricey, but isn’t too bad among casino stocks, since the stock is basically a growth play on Macau.

There is volatility as the 1.5 beta (50% more volatile than the broader market) illustrates, but that’s not out of line for casino stocks. And the 2.2% dividend yield makes WYNN stock a decent bet.

Fold: Caesars Entertainment (CZR)

The Ides of March were famously unfortunate for Julius Caesar nearly two millennia ago. His casino stocks namesake, Caesars Entertainment (CZR), didn’t fare a whole lot better, as CZR stock lost 7% leading up to last week’s anniversary.

Disappointing earnings were to blame for last week’s slide: CZR stock reported a quarterly loss of $12.83 a share — far worse than the $1.49-cent loss Wall Street expected and more than triple the $3.75 loss the company reported for the same quarter in 2012. CZR’s $2.08 billion in revenue was a much narrower miss — analysts had expected $2.12 billion.

While CZR’s Vegas business improved during the quarter, its Atlantic City profits crashed and burned, while sales of Bally’s Las Vegas and The Quad to majority-owned Caesars Growth Partners triggered a loss in the quarter of $1.75 billion.

CZR stock is down nearly 11% since March 4. The biggest challenges it faces are a back-breaking debt load and minimal exposure to the sector’s highest growth plays. CZR has total debt of some $23 billion, and Chairman and CEO Gary Loveman has admitted that the decision not to enter white-hot Macau was a missed opportunity.

Fold: Penn National Gaming Inc. (PENN)

Penn National Gaming (PENN) operates 26 facilities with 31,100 gaming machines, 800 table games, and 2,900 hotel rooms through its Midwest, East/West and Southern Plains segments in 17 jurisdictions.

The company faces headwinds from the U.S. market saturation trend Spectrum Gaming is seeing. Last month, PENN reported a loss of $11.40 per share — far below the 13-cent per share loss analysts were expecting for the fourth quarter. Revenue was down more than 13% year-over-year.

PENN stock has a market cap of nearly $954 million and a PEG ratio of 2.7, a sign that it is overvalued. And shares are down 10% year-to-date. However, there are a few positives for PENN stock: Last month, Massachusetts awarded PENN the state’s first expanded gambling license, which gives it an advantage over other casino stocks. The company is hoping to open a slots business next spring at the Plainridge harness-racing track near Boston, although there is a move afoot to repeal the state’s gambling law.

But if you’re looking for casino stocks to buy, the better play could be Gaming and Leisure Properties (GLPI), a real estate investment trust PENN formed when it spun off 21 of its racetracks and casinos last year. Thanks to the more favorable REIT structure (it must distribute 90% of its taxable income to investors), GLPI boasts a current dividend yield of 5.6%.

As of this writing, Susan J. Aluise did not hold a position in any of the aforementioned securities.