Zacks Investment Ideas feature highlights: MGM Resorts, Wynn Resorts, Las Vegas Sands and DraftKings
For Immediate Release
Chicago, IL – March 22, 2024 – Today, Zacks Investment Ideas feature highlights MGM Resorts MGM, Wynn Resorts WYNN, Las Vegas Sands LVS and DraftKings DKNG.
Should You Bet on DraftKings This March Madness?
I went to the Bahamas with some friends this past weekend to celebrate an engagement. As is often the case with twenty or so guys on a trip near a casino, gambling occurred. Personally, I am not a big gambler, but I was admittedly tempted to hit the blackjack table.
However, it occurred to me that there is a reason that companies such as MGM Resorts, Wynn Resorts and Las Vegas Sands have billion-dollar properties and have made investors billions – the house has an edge over the long term. Instead of gambling, I watched my friends and rooted them on. Of course, everyone except one lost money. The lesson here is that if you have a chance to bet on the house, take it.
Why You Should Bet on DraftKings
Company Overview
Zacks Rank #3 stock DraftKings is the most popular online sports entertainment and gambling company in the United States. The company offers daily fantasy sports contests and sports betting services. Users can participate in fantasy sports competitions by selecting players from real-life sports teams and competing against others based on the statistical performance of those players in actual games.
Additionally, DraftKings provides a platform for sports betting, allowing users to wager on various sports events across different leagues and tournaments. Through its user-friendly interface and wide range of offerings, DraftKings aims to provide sports enthusiasts with an engaging and interactive experience in the world of Sports gaming.
Online Gambling is Exploding
A landmark 2018 Supreme Court decision gave U.S. states the power to legalize sports gambling. Since then, the industry has exploded into a $10 billion industry. Currently, about half of U.S. states have approved sports gambling, with more likely to follow. In other words, there is a lot of “meat left on the bone” for the industry.
Early Mover Advantage
Early mover advantage refers to the competitive edge gained by a company that is the first to enter a new market or introduce a new product or service. Of all the sports gambling offerings, DraftKings has been the best at navigating the regulatory red tape and becoming approved in new states. As of this writing, DraftKings is approved in 22 states. By establishing a foothold before competitors, early movers like DKNG can capture market share, build brand loyalty, and set industry standards, resulting in long-term benefits such as juicier profits.
March Madness Tends to Spark Rallies in the Stock
The wildly popular NCAA college basketball tournament tends to spark a rally in shares of DKNGs with average returns over the next few months as follows:
April = 16.8%
May = 30.80%
Bullish Price & Volume action
A tag of the 10-week moving average in an up-trending stock like DKNG presents a high reward-to-risk ratio for investors. Furthermore, DKNG is a stock that I refer to as “hugger” (a stock that tends to trend smoothly along its moving average, rewarding investors). Finally, volume turnover spiked 32% above the 50-day average on today’s breakout, indicating institutional appetite for shares.
Tendency to Beat Wall St. Expectations
DraftKings has beaten Wall St. expectations in seven of the past nine quarters.
Barstool Sports Partnership
In February, DraftKings and the popular website and social media powerhouse Barstool Sports inked a sports betting deal. The deal is likely to drive DKNG’s bottom line even more because online betting is even more dependent on marketing than traditional betting. Furthermore, online betting offers more options to place bets, such as intra-game bets.
Bottom Line
DraftKings emerges as a compelling investment opportunity amidst the expanding landscape of online sports entertainment and gambling. With its early mover advantage, consistent performance, and strategic partnerships like the one with Barstool Sports, DraftKings exemplifies the potential for growth and profitability in the burgeoning industry.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Las Vegas Sands Corp. (LVS) : Free Stock Analysis Report
Wynn Resorts, Limited (WYNN) : Free Stock Analysis Report
MGM Resorts International (MGM) : Free Stock Analysis Report
DraftKings Inc. (DKNG) : Free Stock Analysis Report
