Top 10 Casino Stocks To Own For 2018


Wynn Resorts (WYNN) sunk to the bottom of the S&P 500 today after China said it would limit ATM withdrawals in Macau.

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Shares of Wynn Resorts dropped 11% to$90.72 today, while the S&P 500 gained 0.2% to 2,246.19.

My colleague Dimitra DeFotis, who runs Barron’s Emerging Markets Daily, explains what happened:

The move is another in a series to tackle the flight of illicit Chinese cash via casinos. According to a South China Morning Post story, Macaus monetary authority is halving the cash withdrawals allowed for holders of China UnionPay bank cards, effective Saturday. Billions of yuan reportedly have disappeared from the mainland, despite government currency restrictions on card purchases of gambling chips.


Wynn wasn’t the only Macau casino operator that took it on the chin today. Las Vegas Sands (LVS) tumbled 13% to $54.67, while Melco Crown Entertainment (MPEL) plunged 14% to $16.87, and MGM Resorts International (MGM) dropped 4.3% to $28.65.

Top 10 Casino Stocks To Own For 2018: Transocean Inc.(RIG)

Advisors’ Opinion:

  • [By Teresa Rivas]

    Transocean (RIG) is rising Thursday afternoon, thanks to an upbeat fourth quarter.


    Agence France-Presse/Getty Images

    The oilfield services company said it earned 63 cents a share (a figure that excludes $13 million in net unfavorable items), well ahead of the nickel a share in earnings analysts expected. Revenue fell 47.4% year over year to $974 million, also above the $806 million consensus estimate. Transocean said its contract backlog was $11.3 billion as of its February fleet status report. Raymond Jamess Praveen Narra and J. Marshall Adkins reiterated an Underperform rating on the stock following the report. They praised the companys ongoing cost controls and strong revenue efficiency, which they expect to continue. But still arent ready to recommend the stock amid a difficult macro backdrop. More detail from their note:


    Transocean continued to minimize costs and maximize efficiency amid a challenging offshore environment, reporting 4Q16 adjusted EBITDA of $414 million, higher than our estimate of $363 million and consensus of $394 million. The beat was driven by lower than expected costs of $344 million (adjusting for favorable litigation), which came in ~12% lower than our estimate of $385 million and guidance of guidance of $375-385 million. Total revenue efficiency came in at 100.3%, as it was boosted by bonus incentives and possibly effective results from the new contracting model, particularly in the high-spec jackup market. The beat to our estimates was also driven by higher than anticipated revenues, which came in at $805 million, above our estimate of $788 million, but below the consensus estimate of $812 million. We note, our adjusted revenue excludes $169 million in early termination fees during the quarter.


    The shares are up 6.6% to $14.16 in recent trading, although theyre down 4% year to date.

  • [By Ben Levisohn]

    On Mar. 2, Transocean (RIG), just seven days after reporting earnings, announced that it would delay filing its 10-K. the timing, particularly for use at Barron’s, wasn’t great, as we had just recommended the stock in the magazine. Still Transocean’s shares weathered the news–it fell only 1.1% on that day–and now the 10-K has been filed. What does it show? RBC’sKurt Hallead andMatthew McKellar explain:


    Agence France-Presse/Getty Images

    RIG has filed its 10-K, which contains details and adjustments related to its previously disclosed tax accounting issues. Certain adjustments for immaterial errors related to accounting for operating items and items such as depreciation, interest income, and loss on impairment and disposal of assets have also been made.

    Adjustments to FY15 have increased income from continuing operations by $71mn, and net income attributable to controlling interest by $74mn. For FY15, adjustments have decreased loss from continuing operations by $66mn and decreased net loss attributable to controlling interest by $74mn.


    Shares of Transocean have dropped 2.1% to $12.78 at 2:33 p.m. today.

  • [By Todd Shriber, ETF Professor]

    None of SQZZ's equity positions account for more than 1.9 percent of the new ETF's weight. Those positions include Dow component General Electric Company (NYSE: GE), Sprint Corp (NYSE: S), Chesapeake Energy Corporation (NYSE: CHK) and Transocean LTD (NYSE: RIG).

  • [By Ben Levisohn]

    Transocean (RIG)tumbled to the bottom of the S&P 500 today as the entire energy sector got crushed on fears that production would start to grow.


    Agence France-Presse/Getty Images

    Transocean dropped 7% to $13.85 today, while the S&P 500 fell 0.6% to2,280.90. The Energy Select Sector SPDR ETF (XLE) dropped 1.9% to$72.85. The price of oil fell 1% to$52.63 a barrel.

    Yes, oil stayed above $50 a barrel, but in a note published this morning, Cornerstone Macro’s Carter Worth warned that a “stuck” oil price could be as damaging as a dropping one:

    Then, of course, theres the inconvenient fact that WTI Crude Oil itself is hopelessly stuck in the low $50 a
    barrel range a level at which it was trading in June of last year. Essentially seven months without any forward progress is the bottom line.


    Transocean’s market capitalization fell to $5.4 billion today from $5.8 billion on Friday. It reported net income of $782 million on sales of $7.4 billion in 2015.

  • [By Paul Ausick]

    Transocean Ltd. (NYSE: RIG) dropped about 6.3% Wednesday to post a new 52-week low of $8.68 after closing Tuesday at $9.26. The 52-week high is $6.96. Volume rose to about 50% more than the daily average of about 12 million shares. The company had no specific news, but consolidation in the offshore drilling business is not a positive for Transocean or any other driller still standing by itself.

Top 10 Casino Stocks To Own For 2018: Terex Corporation(TEX)


Advisors’ Opinion:

  • [By Ben Levisohn]

    RBC’sSeth Weber and team offer their thoughts on Zoomlion’s revised bid for Terex (TEX):

    Bloomberg News

    After the close today, Terex announced that it is moving forward in its negotiations with Zoomlion Heavy Industry Science and Technology Co. following receipt of a non-binding proposal from the Chinese company to acquire all outstanding shares for $31/share in cash.

  • [By Reuben Gregg Brewer]

    Ever walk past a construction site? It’s hard not to be enthralled by all the heavy construction machinery moving things around. With the world’s developing economies still building at a relatively fast pace and developing economies, like the United States, in desperate need of upgrading their aging infrastructure, the companies behind that construction machinery could be just as exciting as a construction site in the years ahead. Which is why Caterpillar Inc. (NYSE:CAT), Cummins Inc. (NYSE:CMI), and Terex Corporation (NYSE:TEX) are three of the top construction machinery stocks to look at right now.

  • [By Ben Levisohn]

    Shares of Terex (TEX) had surged 32% as of the close of trading last Thursday–but dropped 14% the next day after China’s Zoomlion announced that it wouldn’t be pursuing a purchase of the U.S. crane maker after all. In the aftermath of the scuttled deal, Morgan Stanley’s Mili Pothiwala and Nigel Coe cut Terex to Equal Weight from Overweight:

    Balint Porneczi/Bloomberg News

    On Friday morning, Zoomlion announced it had terminated its bid for its proposed acquisition of Terex for $31/ share. This was a clear negative for Terex shares, which traded down ~15% on Friday to $20, given the absence of an event-driven catalyst (following the sale of MHPS to Konecranes, which we assume will be completed). However, we think that the stock’s current discount to the Machinery group on a P/E basis (20%+) is justified, given a still challenged underlying operating environment for the RemainCo, as well as historically uneven company execution – both of which return to the forefront of the investment debate following the removal of the M&A bull case.


    To which all we can say is: Oops.

    Shares of Terex have dropped 0.5% to $20.78

     

Top 10 Casino Stocks To Own For 2018: eBay Inc.(EBAY)

Advisors’ Opinion:

  • [By John Ballard]

    eBay (NASDAQ:EBAY) is handing over the reins of its India business, ebay.in, along with $500 million in exchange for an equity stake inFlipkart, a leading e-commerce company in India. As part of the deal, Flipkart’s customers will gain access to eBay’s global inventory of items for sale on its marketplace, and eBay’s customers will have access to unique Indian items provided by Flipkart.

  • [By James E. Brumley]

    To say eBay Inc (NASDAQ:EBAY) is a big e-commerce outfit would be a significant understatement. It’s a giant, generating $8.9 billion worth of revenue for itself over the course of the past twelve months. That’s not the head-turner though. See, that’s just the cut eBay takes for itself, which is only a nominal percentage of the total amount of business in transacts. During the same twelve months, eBay facilitated sales of $83.3 billion worth of goods. Point being, while eBay is doing well, it’s sellers are doing even better. In some cases, eBay offers a game-changing opportunity for some companies to be in business.

    Up-and-coming star Namaste Technologies (OTCMKTS:NXTTF, CNSX:N) isn’t one of those companies that needs eBay on an existential basis, but now that it’s able to list its goods at the online auction site, don’t be surprised if NXTTF (or N, for investors in Canada) sees a skyrocketing top line.

    Namaste Technologies sells electronic vaporizers, which are more commonly categorized as electronic cigarettes (or e-cigs). Though initially intended as a means of avoiding tobacco smoke without giving up nicotine, it was only a matter of time before the idea was adapted and new technologies were developed to vaporize whatever it is people choose to smoke. Marijuana was an obvious good-fit candidate for the idea, and Namaste Technologies is simply capitalizing on that growing opportunity. The end result: Namaste now operates more than 30 e-commerce retail stores (with monthly traffic of over 550,000 visitors) in 20 countries targeting both medical and recreational users.

    Those who know the story of the advent of marijuana’s legalization and/or those who know eBay inside and out will know that eBay doesn’t allow listings of such paraphernalia… or at least didn’t. That changed in October, when eBay opened up its doors – selectively – while opening up a whole new product category called “Vape Pens, E-Cigarettes & Accessories.”