[Editor’s Note: This article was originally published on May 18, 2020. It has since been updated to represent the most up-to-date information regarding gambling stocks to buy.]
It’s hard to feel lucky when a pandemic spreads across the globe. The novel coronavirus sank a number of betting and gambling stocks. It’s possible that some of them won’t survive, but others should rebound — sooner or later.
Taking a stake in gambling stocks is, like the games themselves, speculative. But there may be compelling value propositions in certain stocks that have been beaten down. Here are five to consider:
- Las Vegas Sands (NYSE:LVS)
- Eldorado Resorts (NASDAQ:CZR)
- Esports Entertainment (NASDAQ:GMBL)
- Boyd Gaming (NYSE:BYD)
- Penn National Gaming (NASDAQ:PENN)
These gambling stocks are handpicked for having either strong momentum or turnaround potential. So, are you ready to spin the big wheel and see if you hit the right numbers?
Gambling Stocks: Las Vegas Sands (LVS)
The world-famous Las Vegas Sands brand of resorts and casinos can be spotted throughout Asia and the United States. And LVS stock was a fairly low-risk investment during times of economic prosperity.
But as they say, markets come in cycles. The economy was in a down cycle during 2020’s first half, and LVS stock has struggled to regain its footing since the steep decline in March.
This struggle was compounded on July 23, when the trading community collectively pushed the LVS share price down 4%. It’s possible that this was an overreaction to Las Vegas Sands’ second-quarter earnings data, which included an adjusted loss per share of $1.05.
Besides, the second quarter wasn’t all bad news. Las Vegas Sands’ interest expenses, net of amounts capitalized, came to $118 million. That’s a substantial improvement compared to the $143 million reported during the same quarter of the previous year.
Plus, the company has demonstrated that it’s willing to adjust to the downbeat economic climate by scrapping its plan to secure a gambling license in Japan. That’s probably a smart move, and it might also be a smart move to accumulate LVS stock today.
Eldorado Resorts (CZR)
In a recent and massive gambling-industry deal, multi-regional casino operator Eldorado Resorts acquired Las Vegas operator Caesars Entertainment. This deal was worth a whopping $17.8 billion.
The newer, bigger company will include Harrah’s, Caesars and the Tropicana in Atlantic City, New Jersey. It will also own some very famous properties in Las Vegas, Nevada. These include the Flamingo, Caesars Palace, Planet Hollywood, Bally’s, Cromwell and Harrah’s Las Vegas, among others.
It has been reported that none other than billionaire investor Carl Icahn will have a stake in the combined company. In fact, Icahn will have a 10% stake, making him the largest single shareholder.
Plus, the geographic scope of the combined company goes beyond the United States. As InvestorPlace contributor Dana Blankenhorn reports, “The new company will operate 55 casino properties in the U.S. and another 12 internationally, under the name London Club.” So, if you’re looking for a big-time casino-market investment, CZR stock is worth checking out.
Esports Entertainment (GMBL)
Not all gambling stocks are affordable, but GMBL stock can be part of your portfolio for less than $10 per share.
That being said, it’s important to know that the 52-week range for GMBL stock is $2.40 to $15.75. In other words, this one’s a fast mover sometimes.
Yet Esports Entertainment may have an edge over most traditional gambling companies today. This company’s focus is on “licensed next generation online gambling” with a focus on esports betting.
Having online operations could be a major advantage during a pandemic. Plus, Esports Entertainment was the “first online gambling company trading on an American stock exchange,” so it’s an early entrant into what could be a very lucrative niche.
In addition, Esports Entertainment is expanding. The company recently agreed to acquire LHE Enterprises Ltd. That’s the holding company of Argyll Entertainment AG, an online sports book and casino operator.
As Esports Entertainment Group CEO Grant Johnson points out, Argyll has more than 100,000 registered users, which puts Esports Entertainment “in a great position to grow revenue moving forward.” Based on the profit potential in this well-positioned and growing company, GMBL stock absolutely deserves your attention.
Boyd Gaming (BYD)
As an owner of 29 gaming and entertainment properties in the United States, Boyd Gaming might not be a household name. But the company has over 24,000 employees and has been around since 1973, so Boyd Gaming is truly a mainstay in the gambling business.
Like most other companies in the sector, Boyd Gaming has fallen on hard times. For 2020’s first quarter, the company posted a net loss of $18.3 million along with disappointing quarterly revenues of $680.5 million.
All that being said, value investors might feel that BYD stock’s decline is an overreaction. The shares quickly tumbled from nearly $35 to less than $8. At the time of this writing, the stock has recovered somewhat but is still nowhere near its February peak.
And don’t think that an older company can’t learn some new tricks. Indeed, Boyd Gaming just announced the debut of its Stardust Social Casino mobile app. This app will feature a wide and regularly updated selection of games that you might have already seen on Boyd Gaming’s casino floors.
It’s a positive sign that Boyd Gaming is updating its business model with the Stardust Social Casino app. All in all, risk-tolerant investors should consider accumulating BYD stock at its currently discounted price.
Penn National Gaming (PENN)
If you’re looking for a diversified company in the gambling stocks space, take a look at Penn National Gaming. From gaming and racing properties to video-gaming terminals and plenty of slot machines, this company runs the gamut in the gambling space.
There’s no point in trying to deny that Penn National Gaming had a challenging first quarter of 2020. But as CEO Jay Snowden put it, “Penn National’s exciting long-term growth story … remains fully intact” as the company continues to develop projects like the Barstool Sports betting app.
In fact, that app could send Penn National Gaming in a whole new, pandemic-proof direction. Snowden cites Barstool’s explosive growth on the TikTok platform, where it now has over 9 million followers. That’s an impressive reach, and it could be the key to higher long-term prices in PENN stock.
On top of all that, investors can view PENN shares as a reopening investment. That’s because Penn National Gaming recently reopened Plainridge Park Casino in Massachusetts as well as Hollywood Casino Bangor in Maine. With that, 90% of Penn National Gaming’s gaming and racing properties are open, which is yet another reason to grow your position in PENN stock.
David Moadel has provided compelling content — and crossed the occasional line — on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets. As of this writing, David Moadel did not hold a position in any of the aforementioned securities