If you’re a gambling man (and let’s face it, most traders are), then you likely are familiar with some of the better stocks in the casino and gaming space like Caesars Entertainment (NASDAQ:CZR) and Las Vegas Sands (NYSE:LVS). As a group, these stocks have captured a lot of attention of late. In mid-February, I discussed some of the reasons why stocks that have exposure to Atlantic City casinos could see a big bounce higher thanks to what was then the expected legalization of online gambling in New Jersey.
That possibility now is reality, and it’s taken many stocks in the space for a big run higher.
Click to EnlargeOne of the stocks I mentioned likely to benefit mightily from the change in New Jersey law was Boyd Gaming Corp. (NYSE:BYD). This company owns and operators the Borgata Hotel Casino & Spa, a flagship destination for Atlantic City gamblers. Since Feb. 15, when my article was originally published, BYD shares have soared nearly 25%. In Wednesday trade, the stock spiked 5.74%.
I couldn’t really find a concrete reason why BYD shares spiked to a new 52-week high in Wednesday trade, but the buying momentum on this stock is definitely in high gear. I suspect that investors and traders will continue to bet on Boyd, especially now that the Borgata’s biggest competition, Revel, just filed for Chapter 11 bankruptcy.
If you’re a trader willing to bet on more upside in this high-flying gaming stock, I think you’ll be rewarded with another 10-15% upside from current levels over the next four to six weeks. As always, to protect your downside in this trade, make sure you set a stop-loss around 5-7% below your official buy price.
At the time of publication, Jim Woods did not hold a position in any of the stocks mentioned here.