Based on the way stocks like Lululemon (LULU) and Best Buy (BBY) have been crapping out in early 2014, investors could be forgiven for thinking Americans had forgotten how to spend. In the attached clip OptionMonster’s Jon Najarian says not to worry, the malls may be deserted but casinos are packed.
“The consumer play is not over,” Najarian insists, ticking through names like MGM (MGM), Las Vegas Sands (LVS) and Boyd Gaming (BYD) and others. “You look at those stocks even in the first part of a very nasty beginning of 2014 they were up. I think they continue to work.”
There is very little more discretionary than taking a visit to the desert or New Jersey and wagering on games where you know for a mathematical fact the odds are stacked against players. Obviously most of these companies have international kickers but if the U.S. economy isn’t working, resort and casino stocks aren’t going to be moving higher as they have been thus far in 2014.
Najarian says another factor working in the gaming sector’s favor is the legalization of on-line gambling in New Jersey and Nevada. Comparing the trend to medical marijuana, the Option Monster says Maryland and Massachusetts want a taste of the action soon.