CHICAGO, Oct. 7, 2014 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the MGM Resorts International (NYSE:MGM-Free Report), Caesars Entertainment Corp. (Nasdaq:CZR-Free Report), Melco Crown Entertainment Limited (Nasdaq:MPEL-Free Report), Las Vegas Sands Corp. (NYSE:LVS-Free Report) and Darden Restaurants, Inc. (NYSE:DRI-Free Report).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Monday's Analyst Blog:
Gambling Stock Roundup
With China's anti-corruption drive weighing on Macau's economic prospects, the gambling companies operating in the region have not seen meaningful growth lately. Not surprisingly, gross gaming revenues in Macau declined significantly in September – marking the fourth consecutive month of decline. Additionally, the casino worker strike in Macau has dealt another heavy blow.
However, the companies operating in the region are busy coping up and doing their best to mitigate the troubles plaguing the economy. On the one hand, MGM Resorts International (NYSE:MGM-Free Report) has taken a step forward and has arranged finance for its Las Vegas Arena, and on the other hand, the company is set to open an Italian restaurant at its Bellagio resort. (Read last to last week's development: Gambling Stock Round Up for Sep 29, 2014)
Recap of the Week's Important Stories:
1. Gaming Inspection and Coordination Bureau declared a 11.7% year-over-year fall in gross gaming revenues in the month of September to $3.2 billion. This marks the fourth monthly drop in a row and the steepest decline since Jun 2009. However, the decline was in line with analysts' expectation of a 12–13% fall.
The substantial fall reflects the restrictions imposed by the Chinese government to stop illegal money transfers from mainland China to Macau casinos. The government's crackdown on corruption, which includes restrictions on VIP gamblers to stop billions of dollars from being siphoned off illegally from mainland China to Macau, has affected footfall at the casinos and thereby revenues.
Moreover, a slump in the Chinese economy has restricted consumer spending. Per media reports, protests in Hong Kong would have also compelled mainland Chinese to postpone their Hong Kong-Macau trips, thereby lowering guest traffic.
2. Macau, the only place in China where gambling is legal, is reportedly facing labor unrest. Last week, a large number of casino workers in Macau went on a strike to demand higher wages and better benefits. This is likely to worsen the situation in Macau that is already being hurt by declining revenue trend over the past few months.
3. MGM Resorts and Anschutz Entertainment Group (AEG), one of the leading sports and entertainment presenters in the world, announced settlement of a $200 million bank facility to finance the development and construction of the new Las Vegas Arena. The arena will host boxing and other sporting events, awards shows and special events.
Set to open in 2016, this $375 million indoor arena is located between New York-New York and Monte Carlo resorts. This 20,000-seat arena will also feature 50 luxury suites and other specially designed exclusive hospitality offerings. Also, the stadium is expected to host more than 100 events annually.
4. The first Italian restaurant – Lago – is slated to open in Mar 2015 at Bellagio resort, a luxury hotel and casino in Las Vegas owned by MGM Resorts. Notably, the Lago restaurant will replace the Circo eatery that was closed on Sep 30, 2014. Apart from having a fountain view, the eatery will also flaunt an outdoor patio.
5. MGM Resorts, which has been primarily sponsoring fantasy sports events, is now planning to invest in fantasy sports leagues. The company was in talks with regulators at the Global Gaming Expo Conference to ensure legal approval of such an initiative. This move comes as part of MGM Resorts' belief that betting on sports is a growing part of the casino business. Meanwhile, fantasy sports leagues are also gaining significant popularity. The company is also willing to initiate sports betting in Las Vegas, which is not currently legal in the state.
Performance
Share prices of most of the gambling stocks declined last week. Caesars Entertainment Corp. (Nasdaq:CZR-Free Report) collapsed a significant 10.6%, followed by Melco Crown Entertainment Limited's (Nasdaq:MPEL-Free Report) 6.4% decline. However, Las Vegas Sands Corp. (NYSE:LVS-Free Report) gained 0.9% over the same time frame, possibly owing to its management's expectation of a recovery in Macau over the next two months.
Darden Outlook Up on Improved September Comps
Share price of Darden Restaurants, Inc. (NYSE:DRI-Free Report) immediately increased 1% after the company provided an update on growth in domestic comps for the month of September and its fiscal second quarter 2014 expectations.
U.S. comps for most of its restaurant chains grew year over year. Also, the company marginally increased its earnings guidance for the fiscal second quarter. It now expects earnings at the higher end of the previously announced guidance of 26 cents to 28 cents. Buoyed by this optimistic view, Darden's share price has been gaining momentum since then.
We remind investors that Darden had completed the sale of its Red Lobster segment in Jul 2014. This leaves it with three restaurant chains: Olive Garden, LongHorn Steakhouse and The Specialty Restaurant Group.
Comps at Olive Garden grew 0.6%, better than the decline of 2.6% in Sep 2014. Also, comps at LongHorn Steakhouse rose 3.2%, topping the 2.9% growth achieved last year. Except Bahama Breeze that declined 0.3%, all the restaurants of The Specialty Restaurant Group experienced year-over-year growth. Comps at The Capital Grille, Yard House, Seasons 52 and Eddie V's were up 6.4%, 3.8%, 1.3% and 4%, respectively.
It seems the efforts to grow and develop LongHorn Steakhouse and Specialty Restaurants are yielding positive results. Moreover, the company's Olive Garden Brand Renaissance plan – that was launched to bring a turnaround in the restaurant chain's business – seem to have begun reaping benefits. The Olive Garden Brand Renaissance plan includes core menu innovation, simplification of restaurant operations and re-imaging. The company expects the plan to reignite traffic growth, enhance guest experience and support margin expansion.
Despite Darden's efforts, Starboard – an 8.8% stakeholder in the company – is currently questioning Darden's working strategy.
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today.
About Zacks
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros.
Get the full Report on MGM - FREE
Get the full Report on CZR - FREE
Get the full Report on MPEL - FREE
Get the full Report on LVS - FREE
Get the full Report on DRI - FREE
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
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 http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Logo - http://photos.prnewswire.com/prnh/20101027/ZIRLOGO
SOURCE Zacks Investment Research, Inc.
WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?
Newsrooms &
Influencers
Digital Media
Outlets
Journalists
Opted In
Share this article