Funds are buying lots of casino stocks as states legalize gambling

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By James Dennin for Kapitall.

Atlantic City is coming apart at the seams: In a city where unemployment figures are already double the national and state average, casino closings could prompt the unemployment number to rise  by as much as a third.

But the reason isn't a waning affinity for gambling. It's actually the opposite. 

In their effort to boost revenues, state officials in Pennsylvania and New York have looked at gambling as a way to make ends meet. New York is currently reviewing bids to open four casinos as close as 50 miles from Manhattan.

New Jersey has legalized online gambling, as well. And so has Maryland, which collects a quite hefty 60% tax on all slot revenues

The proliferation of new options has been hard on cities like Atlantic City, who obviously benefitted from the lack of competition. But the new laissez-faire attitude of states has been good for the casino owners. 

Four out of the 18 publicly traded companies in resorts and casinos are experiencing spikes in institutional purchasing from groups like hedge funds and pensions. This suggests growing demand for the stock among the investors with the best information. 

Do you think the legalization of gambling will continue to spread, boosting revenues for these casino stocks? Use the list below to begin your analysis, and let us know what you think in the comments. 

Click on the interactive chart to view data over time. 

1. Boyd Gaming Corp. ( BYD , Earnings , Analysts , Financials ): Operates as a multi-jurisdictional gaming company in the United States. Market cap at $1.17B, most recent closing price at $10.84.  

Net institutional purchases in the current quarter at 8.9M shares, which represents about 12.8% of the company's float of 69.52M shares.

Major holder: PAR Capital Management, Inc. at a 9.85% stake.

2. Century Casinos Inc. ( CNTY , Earnings , Analysts , Financials ): Operates as an international casino entertainment company in the United States and internationally. Market cap at $130.19M, most recent closing price at $5.34.  

Net institutional purchases in the current quarter at 1.6M shares, which represents about 7.97% of the company's float of 20.07M shares. 

Major holder: Wells Fargo & Company at a 8.29% stake.

3. MTR Gaming Group, Inc. ( MNTG , Earnings , Analysts , Financials ): Engages in racing, gaming, and entertainment businesses in the United States. Market cap at $139.38M, most recent closing price at $4.92.  

Net institutional purchases in the current quarter at 654.8K shares, which represents about 5.09% of the company's float of 12.87M shares. 

Major holder: PAR Capital Management, Inc. at a 9.85% stake.

4. Pinnacle Entertainment Inc. ( PNK , Earnings , Analysts , Financials ): Develops, and operates casinos, and related hospitality and entertainment facilities in the United States. Market cap at $1.45B, most recent closing price at $24.30.  

Net institutional purchases in the current quarter at 6.9M shares, which represents about 12.94% of the company's float of 53.31M shares. 

Major holder: BAMCO Inc. at a 9.93% stake.

(List compiled by James Dennin. Monthly returns sourced from Zacks Investment Research, all other data sourced from Finviz.)

Kapitall Wire is a division of New Kapitall Holdings, LLC. Kapitall Generation, LLC is a wholly owned subsidiary of New Kapitall Holdings, LLC. Kapitall Wire offers free investing ideas, intended for educational information purposes only. It should not be construed as an offer to buy or sell securities, or any other product or service provided by New Kapitall Holdings, LLC, and its affiliate companies.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Stocks

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