2016 Las Vegas Stock Recap

With the calendar now showing January 2017, let's take a look back and see how Las Vegas stocks did in 2016.

The big three Las Vegas stocks - MGM Resorts International, Wynn Resorts, and Las Vegas Sands all had good years increasing by more than 20% each. The companies rode the wave of a recovering Macau market combined with strong non-gaming Las Vegas metrics.

In Macau Wynn Palace opened on the Cotai Strip in August. Sands opened The Parisian a few weeks later in in September. Meanwhile in the United States MGM National Harbor near Washington DC was opened in December to capacity crowds.

Caesars Entertainment stock finished the year up just over 7%. Caesars is still involved in seemingly never-ending bankruptcy litigation, but the stock could have some speculation value if they are able to escape bankruptcy with most of the company still in-tact.

Regional operators Boyd Gaming and Penn National didn't fare as well as their international counterparts. Boyd was up a slight 1.5% as they integrated their new Aliante and Cannery acquisitions. Penn was down 13.9% perhaps negatively affected by the anticipated opening of MGM National Harbor stealing business from their Charles Town property.

2016 Las Vegas stock results: (not including dividends)

Company	Symbol	Start	End	Change
MGM	MGM	22.72	28.83	+26.9%
Wynn	WYNN	69.19	86.51	+25%
Sands	LVS	43.84	53.41	+21.8%
Caesars	CZR	7.89	8.50	+7.7%
Boyd	BYD	19.87	20.17	+1.5%
Penn	PENN	16.02	13.79	-13.9%

MGM buys Borgata - Monte Carlo Rename Next?

Boyd Gaming has agreed to sell its 50% ownership stake of The Borgata in Atlantic City to MGM Resorts International for a purchase price of $900 million. MGM was already the owner of the other 50% stake, however Boyd was the operator of the hotel and casino.

The announcement was made via separate MGM Resorts and Boyd Gaming press releases.

After the sale is complete MGM Resorts will transfer ownership of The Borgata to their real estate subsidiary MGM Growth Properties. The MGP REIT will then lease the property back to MGM, who will operate the hotel and casino. Borgata will become an M Life Rewards property.

This transaction doesn't have a direct impact on Las Vegas, but there's an interesting wrinkle. Now that MGM owns 100% of The Borgata I assume they are free to use "Borgata" as a brand name in Las Vegas.

Last year it was announced that Monte Carlo would be getting a name change. I had speculated that Borgata Las Vegas would be a great name for Monte Carlo. MGM's purchase of The Borgata today takes that unlikely scenario one step closer to reality.

Update - June 3, 2016: I guess it wasn't meant to be. The new name of Monte Carlo is Park MGM.

Boyd buys Aliante

Boyd Gaming is expanding their reach in the Las Vegas locals market as they have agreed to purchase Aliante Casino and Hotel for $380 million.

Boyd seems to be in a buying mood as they are also rumored to be nearing a deal to purchase Cannery Casino Resorts which would give them even more Las Vegas locals exposure.

Las Vegas locals is Boyd's bread and butter so these deals make perfect sense.  Is too much of Boyd's revenue is concentrated in one market though?  I wonder if Boyd will be looking to acquire more properties outside of Vegas.

Boyd still doesn't have a property on the Strip though after abandoning the Echelon Place development a number of years back.

It's interesting that Boyd at one point was set to open a multi-billion dollar resort complex on the Strip, and now they're reduced to buying Aliante and Cannery.

November 2015 Las Vegas Stock Recap

With the calendar now showing December 2015, let's take a look back and see how Las Vegas stocks did in the month of November.

After a blazing hot October for Las Vegas stocks, they came back down to earth a little bit in November.

Caesars Entertainment was the only stock finishing up in November, inching up a little over 5% after soaring over 36% in October.

MGM Resorts International and Boyd Gaming were relatively flat in October, both declining slightly.

Wynn Resorts and Las Vegas Sands both were both down a little over 10% in November after both had a strong October. Some issues in Macau continue to weigh on these two operators.

Penn National was down almost 11% in November, after having the weakest performance of all the Las Vegas stocks in October. I'm guessing their master lease accounting issues could have hurt their stock price recently.

Company	Symbol	Start	End	Change
Caesars	CZR	8.05	8.47	+5.22%
MGM	MGM	23.19	22.74	-1.94%
Boyd	BYD	19.99	19.59	-2%
Wynn	WYNN	69.95	62.77	-10.26%
Penn	PENN	17.86	15.95	-10.69%
Sands	LVS	49.51	44.06	-11%

Fontainebleau For Sale - Who Will Buy?

The Wall Street Journal reported today that Carl Icahn is looking to sell the Fontainebleau. The property will be listed by CBRE for $650 million.

I immediately starting thinking about who might be a candidate to buy and finish the stalled Fontainebleau project. I'm going to spend the rest of this blog post speculating about which companies might be in the mix.

MGM Resorts International and Caesars Entertainment are the two largest Las Vegas hotel/casino companies but neither of them are really looking to expand in Vegas at the moment. Plus MGM will be completing a REIT conversion soon, and Caesars is going through a partial bankruptcy. I don't see either of these giants buying Fontainebleau.

Wynn Resorts boss Steve Wynn has long said he doesn't want to build in Las Vegas again. His frustration with the Macau government and endless headaches getting his Boston project off the ground might have him singing a different tune though. The rub: Wynn likes to build from scratch and the Fontainebleau structure might not be a blank enough slate for architect DeRuyter Butler and designer Roger Thomas to work their magic.

Like Wynn, Las Vegas Sands and Sheldon Adelson have shown a lack of interest in building anything new in Vegas. I actually think the Fontainebleau would be a great fit though. LVS has deep pockets so finishing the resort wouldn't be a problem, and the location near the planned convention center expansion would fit right in with their convention heavy business model. The best part: They could call the property Sands Hotel and Casino resurrecting an iconic Las Vegas brand.

Speaking of iconic properties: Boyd Gaming has been looking to get back on the Strip ever since they demolished The Stardust and failed to replace it with Echelon Place, later selling the property. While I would be in favor of Boyd buying Fontainebleau and renaming it The Stardust (or Borgata Las Vegas perhaps?) it seems unlikely they would undertake such a large project so shortly after abandoning Echelon.

Penn National was seriously considering purchasing Fontainebleau before ultimately losing out to Carl Icahn. Since then they have entered the Las Vegas market with purchases of M Resort and later Tropicana. If Penn was unwilling to spend $150 million to buy Fontainebleau in 2010 I'm guessing they don't want to spend $650 million in 2015.

Treasure Island owner Phil Ruffin was in the news earlier this week as it was reported he made a recent $1.3 billion failed bid to buy The Mirage. If Ruffin has that much cash to spend could he possibly want to buy the Fontainebleau? It seems like a real possibility to me.

Other regional operators like Eldorado Resorts, Golden Entertainment, Full House Resorts, and Pinnacle Entertainment are likely eager to get into the Las Vegas market but probably don't have the money to make a deal like Fontainebleau happen. Could one of these companies partner up with a rich benefactor like Ruffin to get it done?

Lastly and perhaps most likely to buy Fontainebleau are private equity real estate companies. Cosmopolitan parent company Blackstone might be a possibility if they are looking to expand their casino holdings. Once rumored Mirage buyer Starwood Capital might also be looking to buy.

October 2015 Las Vegas Stock Recap

With the calendar now showing November 2015, let's take a look back and see how Las Vegas stocks did in the month of October.

October turned out to be an amazing month for Las Vegas stock returns with every stock I track finishing green, and 5 out of the 6 finishing up by more than 20%.

Caesars Entertainment has been on a wild bankruptcy fueled roller coaster ride. After soaring an incredible 83.3% in August they came crashing back down to earth in September falling 38.32% only to turn it around again in October jumping up 36.67%.

Wynn Resorts and Las Vegas Sands both were up big in October after declining significantly in September. While Steve Wynn was angry at the Macau government during Wynn's earnings call, Sheldon Aldelson was nothing but respectful.

MGM Resorts International had a 25% gain in October highlighted by the news that they are creating a REIT called MGM Growth Properties.

Boyd Gaming rode the downtown Las Vegas success wave with their stock increasing almost 22% in October.

Penn National was "only" up 6.4% in October. I'm guessing their limited exposure to Las Vegas compared to the other stocks kept them form having the same explosive October results.

Company	Symbol	Start	End	Change
Caesars	CZR	5.89	8.05	+36.67%
Wynn	WYNN	53.12	69.95	+31.68%
Sands	LVS	37.95	49.51	+30.46%
MGM	MGM	18.45	23.19	+25.69%
Boyd	BYD	16.30	19.99	+21.96%
Penn	PENN	16.78	17.86	+6.44%

Gaming Roundup - Studio City Macau Opens

Studio City in Macau has opened. The 3 plus billion dollar hotel designed in part to bring more non-gaming amenities to Macau features a batman ride and a figure eight ferris wheel in the middle of the building.

Studio City should be a good barometer of how non-gaming attractions do in the Macau market, especially since the government only granted them 250 tables.

Next door to Studio City on the Cotai Strip is The Parisian. The 2.7 billion dollar Las Vegas Sands owned hotel and casino will open in late 2016 or early 2017. It was originally planned for a spring 2016 opening so it's being pushed back a bit.

Back here stateside Caesars Entertainment is halfheartedly trying to sell their bankrupt CEOC unit, but it appears there aren't any bidders likely because Total Rewards would be excluded from the transaction.

Boyd Gaming, Penn National, and Eldorado Resorts all reported earnings within the past few days. All three locals operators seem to be doing well growing EBITDA, but I like net income better which seems to be hard to come by.

September 2015 Las Vegas Stock Recap

With the calendar now showing October 2015, let's take a look back and see how Las Vegas stocks did in the month of September.

Boyd Gaming was the only stock I track that was up in September. It's performance was likely buoyed by strong trends in downtown and the Las Vegas locals market.

Penn National was brought down by the rest of the sector, but since they don't have any international exposure they weren't down as much as the others.

MGM Resorts International was down almost ten percent. Their exciting upcoming projects including the Las Vegas Arena and The Park were overshadowed by their exposure to Macau, which was weak.

Las Vegas Sands and Wynn Resorts both declined significantly again in September. Along with general softness in Macau, reports of troubles in the high end junket market has sent these two stocks into a tailspin.

Caesars Entertainment was the big winner in August soaring an incredible 83.3%. They came crashing back down to earth in September though falling 38.32%. The Caesars bankruptcy proceedings are very uncertain at this point, and it looks like investors are becoming less certain of a turnaround.

Company	Symbol	Start	End	Change
Boyd	BYD	16.10	16.30	+1.24%
Penn	PENN	18.16	16.78	-7.60%
MGM	MGM	20.43	18.45	-9.69%
Sands	LVS	46.23	37.95	-17.91%
Wynn	WYNN	75.05	53.12	-29.22%
Caesars	CZR	9.55	5.89	-38.32%

August 2015 Las Vegas Stock Recap

With the calendar now showing September 2015, let's take a look back and see how Las Vegas stocks did in the month of August.

Caesars Entertainment was the big winner in August soaring an incredible 83.3%. They had a strong earnings report combined with some positive bankruptcy news. Caesars stock is highly speculative given their possible bankruptcy, but those willing to gamble reaped the rewards in August.

MGM Resorts International also reported solid earnings, and their stock was up on the news that they are strongly considering a REIT conversion.

Penn National officially became the owners of the Tropicana, but their stock was down slightly in August. Fellow regional player Boyd Gaming was also down.

Las Vegas Sands and Wynn Resorts both declined significantly in August as they were affected by the Chinese stock market.

Company	Symbol	Start	End	Change
Caesars	CZR	5.21	9.55	+83.30%
MGM	MGM	19.62	20.43	+4.13%
Penn	PENN	19.08	18.16	-4.82%
Boyd	BYD	17.09	16.10	-5.79%
Sands	LVS	56.04	46.23	-17.51%
Wynn	WYNN	103.23	75.05	-27.30%

Las Vegas Stocks Fall in Global Selloff

In what has been dubbed on Twitter as Black Monday - stocks were down in a big way today as China fears caused a global selloff. The Dow, NASDAQ, and S&P 500 all fell by more than 3.5% on the day.

The big Las Vegas stocks were hard hit as they rely on the China economy in their Macau operations. Wynn Resorts fell almost 6.5%, MGM Resorts International was down 5% and Las Vegas Sands was off by 4%.

Even the regional gaming companies without China operations were affected by the selloff. Boyd Gaming was down by 3.3% and Penn National fell by just over 2.5%.

Caesars Entertainment bucked the trend however as they were up almost 12% on favorable bankruptcy news and good Atlantic City numbers. The fact that Caesars doesn't have any Macau operations also probably helped on this particular day.

Company	Symbol	Open	Close	Change
Caesars	CZR	8.02	8.98	+11.97%
Penn	PENN	17.69	17.20	-2.55%
Boyd	BYD	16.03	15.50	-3.31%
Sands	LVS	47.99	46.05	-4.04%
MGM	MGM	20.59	19.54	-5.10%
Wynn	WYNN	81.77	76.48	-6.47%%

July 2015 Las Vegas Stock Recap

With the calendar now showing August 2015, let's take a look back and see how Las Vegas stocks did in the month of July.

Boyd Gaming increased by almost 15 percent as the company reported strong second quarter earnings.

MGM Resorts International had a very eventful July. They first sold Circus Circus Reno and Silver Legacy to Eldorado Resorts. Then came the news that showtimes were being cut at the Mirage Volcano. The bombshell came when it was reported The Mirage was sold to Starwood Capital. All of this resulted in a 7.5 percent increase to the stock price. It should get even more interesting when MGM reports earnings next week.

Las Vegas Sands reported strong Las Vegas trends in the face of a stabilizing Macau market.

Wynn Resorts stock was up almost five percent on their second quarter earnings report. The earnings conference call got interesting as Steve Wynn talked about lowering craps odds to 2X.

Penn National had another good month, up almost four percent. Along with reporting strong earnings, Penn has plans for the Tropicana which could include the potential for a new hotel tower in the future.

July was a roller coaster ride for Caesars Entertainment. The month started out with Gary Loveman officially being replaced as CEO by Mark Frissora. Later in the month the company's stock jumped up 22% in one day on positive bankruptcy news only to fall 40% the very next day on negative news. The end result was the stock down fifteen percent in July. Next week could be even more volatile as Caesars reports earnings and Frissora has his first conference call.

Company	Symbol	Start	End	Change
Boyd	BYD	14.95	17.09	+14.31%
MGM	MGM	18.25	19.62	+7.51%
Sands	LVS	52.57	56.04	+6.6%
Wynn	WYNN	98.67	103.23	+4.62%
Penn	PENN	18.35	19.08	+3.98%
Caesars	CZR	6.12	5.21	-14.87%

July 2015 Business News Roundup

With earnings season in full swing on Wall Street there were a few notable bits of Las Vegas business news this week.

Nevada regulators approved the merger of Lakes Entertainment and Golden Gaming. The combined company will be called Golden Entertainment and will be publicly traded. Golden currently operates in Nevada owning a few casinos in Pahrump along with taverns and slot machines located in grocery stores and other businesses. Lakes owns the Rocky Gap resort in Maryland.

Boyd Gaming reported second quarter 2015 earnings. Their Las Vegas properties had solid results. Las Vegas Locals revenue was up 3.21% from the second quarter last year, and Downtown was up 5.19%. Boyd stock was flat today on the news.

Las Vegas based Pinnacle Entertainment agreed to sell its real estate to Gaming and Leisure Properties (GLPI). Under this arraingement Pinnacle will continue to operate their resort properties while paying rent to GLPI. Penn National has a similar arrangement, as GLPI was split out from that company a few years ago.

In case you missed them earlier this week also check out my blog posts about Las Vegas Sands earnings and Penn National's plans for Tropicana.

June 2015 Las Vegas Stock Recap

With the calendar now showing July 2015, let's take a look back and see how Las Vegas stocks did in the month of June.

Penn National had a good month, up 10%. The Tropicana's new owners experienced strong regional gaming, especially at their new Massachusetts property.

Boyd experienced a slight uptick as the Las Vegas locals market shows some signs of improvement.

Las Vegas Sands was up slightly despite an uncertain Macau market, which sent Wynn Resorts down slightly.

MGM Resorts International dropped almost 9%, in part because of the death of Kirk Kerkorian, and the news that his estate will be selling off their stake in the company.

The big loser in June was Caesars Entertainment, down almost 35% on bankruptcy fears.

Company	Symbol	Start	End	Change
Penn	PENN	16.63	18.35	+10.34%
Boyd	BYD	14.31	14.95	+4.47%
Sands	LVS	50.83	52.57	+3.42%
Wynn	WYNN	100.69	98.67	-2.01%
MGM	MGM	20.05	18.25	-8.98%
Caesars	CZR	9.36	6.12	-34.62%

Boyd Updates Echelon Status

Boyd Gaming company CEO Keith Smith gave an update on the stalled Echelon Place project during the company's first quarter 2011 earnings conference call question and answer session on Tuesday, May 3rd.

Smith confirmed that nothing will be done on the project anytime soon, and said that Boyd would consider selling some or all of the land if presented the right opportunity:

"With respect to the Echelon development on the Strip, we continue to, kind of, I guess keep it as an option and assess our future. We are not taking any specific actions right now. We're, obviously, continuing to watch the market and try and determine when the best time to move forward on that asset may be. It's clearly not today. It's clearly not this year. It's probably not next year. As we kind of look into the future of the Strip and we look into the future of consumer demand and when it hits a point that you could add another project of that caliber. So if we had an opportunity to sell some of the land, we just sit on 88 acres, would we entertain it? Sure. That opportunity hasn't presented itself. We clearly have long-term confidence in Las Vegas, in Las Vegas Strip. We look forward to having an asset on the Strip at some point in our future as a company. We think, strategically, that's important for us. And still have that as a longer-term focus as we look to the growth of our company."

Source: Q1 2011 Boyd Gaming Corp Earnings Conference Call.
Transcript courtesy of Seeking Alpha.

Boyd won't buy rest of Borgata

Boyd Gaming announced today that it will not purchase the rest of the Borgata in Atlantic City. Borgata was a 50/50 joint venture between Boyd and MGM. Recently MGM announced that they had an offer on the table to sell their share of the property. That offer was made by Leonard Green & Partners.

As the operating partner Boyd had a chance to match that offer. Today Boyd announced that they were declining to purchase the rest of the property:

"Given other opportunities and our current focus on deleveraging our balance sheet, the current offer would not provide a sufficient return on investment for our shareholders. Despite this decision, we are confident in the future of Borgata. The property represents a major investment by Boyd Gaming, and it has delivered substantial value for our shareholders. We remain comfortable with our current position as managing member and 50% owner of Borgata, the region's premier destination resort."

Source: Boyd Press Release.

MGM Sells Borgata

MGM Resorts International is close to selling their 50% stake of the Borgata in Atlantic City. The company announced it had received an offer from an unnamed source, and is now waiting on approval from the other half of the Borgata ownership, Boyd Gaming.

MGM will receive about $250 million cash in the deal, which calls for the buyer to take over half of the Borgata's $875 million debt load. So essentially the deal is worth $687.5 million which would value the whole Borgata property at $1.375 billion.

Selling the Borgata allows MGM to chip away at their massive debt. It also means they will be out of New Jersey completely which will give them more freedom to operate in Macau. While the Borgata is a great property and the best thing in Atlantic City, MGM is probably happy to sell given the circumstances.

Source: MGM Press Release.