Casino Stocks to Buy: iShares MSCI Japan ETF (EWJ)
Though it’s obviously not a direct play on casino stocks, investors would be remiss not to consider the exchange-traded fund iShares MSCI Japan ETF (NYSEARCA:EWJ). As I mentioned previously, the legalization of Japan casinos has opened up an entire market of potential. Not only that, once the ball gets rolling, this market would be the second biggest of its kind.
This floodgate of international traffic is exactly what the laggard EWJ needs.
The other point about the Japanese legalization is the timing behind the decision. In a few short years, the world stage will belong to Tokyo when it hosts the 2020 Summer Olympic Games. Although casinos are unlikely to be opened in time for the games, city promoters can advertise their future plans. Visitors who may be enamored by Japan will then have an incentive to come back.
That at least gives Tokyo a chance to actually profit from hosting the international competition. It may also give the EWJ a good-sized kick in the rear.
To be fair, the EWJ wouldn’t classify as a major disappointment, but it certainly wasn’t great. Last year, the ETF brought in over 4%. Against the low of 2016, the EWJ was up nearly 21%. But the reason why so many Japanese companies fail to reach the “stocks to buy” list are the wobbly fundamentals. It’s a lot of two steps forward, two-and-a-half steps backwards. Frankly, it drives investors nuts.
But with Prime Minister Abe firmly doing what is necessary, I’d take another crack at EWJ.