Picking Winners in the Casino Sector

• By the tickerspy.com Staff
• On 12:22 pm EDT, Wednesday October 21, 2009

Casino stocks are a tough bet in this market, but the sector has gotten a lot cheaper over the last month.

The outlook for the casino sector remains hazy, but a handful of players have managed to eek out gains amid the confusion. Over the last week, Penn National Gaming (NASDAQ: PENN - News) is among only three casino stocks to stay positive, despite missing estimates for Q3 earnings. Penn's third-quarter net income was $21.4 million, or 20 cents a share. After adjusting for certain expenses, the company's EPS was 33 cents for the period, two cents below estimates. Revenue picked up on improved gaming numbers, but also missed the Street's expectations.

Penn lowered its full year profit guidance to $1.01 per share from $1.27 a share, which was already below analyst estimates. Still, investors seem pleased with the news, sending shares higher by 5%.

As a whole, the Casino Stocks Index is up by 1.5% today. It is now underperforming the S&P 500 by -9% over the last month.

Other weekly winners include Pinnacle Entertainment (NYSE: PNK - News) and Monarch Casino & Resort (NASDAQ: MCRI - News). Pinnacle is adding 4% today after announcing plans to open a riverboat casino in Baton Rough, Louisiana in late 2011 yesterday evening.

MGM Mirage (NYSE: MGM - News) is less than 1% from positive territory over the last five sessions. Yesterday, Bloomberg reported that Kirk Kerkorian may be looking to unload his 37% stake in the casino.

Over the last month, Isle of Capri Casinos (NASDAQ: ISLE - News), Melco Crown Entertainment (NASDAQ: MPEL - News), and Las Vegas Sands (NYSE: LVS - News) have all fallen by -10% or more.

As of this writing, the Casino Stocks Index is one of the 15 worst-performing tickerspy Indexes over the last month, down by -6%.

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