Wynn, Las Vegas Sands: Short Term Short Covering Candidates
October 8, 2008 at 5:30 PMPosted by Thomas Catino
With the broader market very near or at a tradable bottom, these two gaming stocks are ideal short term bounce candidates that are likely to have some pretty large percentage moves as soon as a turnaround happens. Time and time again, Wynn Resorts (WYNN) and Las Vegas Sands (LVS), volatile stocks with high betas of 2.3 and 2.8 respectively, have shown some immense trading ranges and healthy upside after a bottom was reached. The last time the Dow and NASDAQ made a major short term bottom was during January and July and look what happened over the next seven trading sessions; (low, high) LVS = Jan. 22 - 30 70.7, 89.64 Jul. 15 – 22 30.56, 56.67 WYNN Jan. 22 - 30 96.36, 113.86 Jul. 15 - 22 71.87, 106.95.
There are some news items that could help inspire a rally this time around too. First is a bit of insider buying seen in shares of Wynn. Barron’s highlights that board member John Moran bought 10,000 shares of Wynn at $72.47 last Thursday following a similar purchase back in June when he acquired $1.7 million worth of stock – around the same time the company announced it would begin to buy back $1.2 billion worth of stock. Then there is Las Vegas Sands which is coping with a slew of credit downgrades, analyst rating downgrades and price target changes. The casino operator has a staggering amount of debt of $8.92 billion but did have some news last week that billionaire CEO Sheldon Adelson would loan the company $475 million to help meet its obligations, standing firm on his commitment to backstop the company.
But of course, what will help the most is some short covering as bears look to take some profits. Just look at the sizable short positions; Las Vegas Sands has a float of 104.88 million shares with 32.39 million shares short while Wynn has a 47.9 million share float and 15.8 million shares short.
There are some news items that could help inspire a rally this time around too. First is a bit of insider buying seen in shares of Wynn. Barron’s highlights that board member John Moran bought 10,000 shares of Wynn at $72.47 last Thursday following a similar purchase back in June when he acquired $1.7 million worth of stock – around the same time the company announced it would begin to buy back $1.2 billion worth of stock. Then there is Las Vegas Sands which is coping with a slew of credit downgrades, analyst rating downgrades and price target changes. The casino operator has a staggering amount of debt of $8.92 billion but did have some news last week that billionaire CEO Sheldon Adelson would loan the company $475 million to help meet its obligations, standing firm on his commitment to backstop the company.
But of course, what will help the most is some short covering as bears look to take some profits. Just look at the sizable short positions; Las Vegas Sands has a float of 104.88 million shares with 32.39 million shares short while Wynn has a 47.9 million share float and 15.8 million shares short.
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