Jason Ader, one of the best-known names in the gaming investments, talks numbers on what's next for the industry.
Casino stocks are on a serious winning streak.
Wynn, Las Vegas Sands and MGM shares are up a respective 35%, 40%, and 57% in the last year.
Curiously enough, the stock that has done the best is the one that is most tethered to recovery in Vegas.
Does this out-performance speak to China weakness, where Las Vegas Sands and Wynn resorts get the vast majority of revenues, or Vegas strength, where MGM is betting its chip?
One of the best people in the world to ask is Jason Ader, Founder and CEO of Ader Investment Management.
Before becoming a fund manager, Ader was in the top ranks of Institutional Investor Magazine’s list of gaming analysts for nine years straight. He currently sits on the board of Las Vegas Sands.
Despite the recent outperformance of MGM, Ader believes the Las Vegas market is in a very challenging situation. He thinks it’s very overbuilt and saturated with hotel rooms.
Another indication that the Strip’s health is in question: The economy in Sin City as a whole along with the rest of Southern Nevada may be improving, but it’s still tough. Unemployment in Vegas is 9.8% and Nevada’s employment situation is the worst in the country. Yesterday, University of Nevada, Las Vegas released a report forecasting Nevada’s job growth to be slower than the rest of America. It also points out that the state has the highest percentage of underwater home ownership.
Where does Ader see the Las Vegas gaming industry headed next? Watch the video above to find out.
[Disclosures: Jason Ader is a board member of LSV. His firm, Ader Investment Management, just successfully waged a proxy battle and put Ader Investment Group’s vice president on IGT’s board in April.]