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Gaming stocks as a whole showed modest increases in their average daily prices during May, the fourth such occurrence in the first five months of 2011.
In a report to clients, Las Vegas-based financial consultant Applied Analysis said the gaming industry seems to be rebounding from the nearly two-year-long recession.
"Key tourism indicators continued to track upwards during the month, suggesting increased stability may prevail within the sector, particularly in Las Vegas," Applied Analysis principal Brian Gordon said.
Growth in air traffic in and out of Las Vegas and increasing occupancy and hotel room rates, coupled with 13 straight months of increased visitation, have given a boost to publicly traded companies with holdings in Las Vegas.
Eight of the 10 gaming companies followed by Applied Analysis for the company's index showed increases in their average daily stock prices.
The index, which takes into account more than 300 market variables, grew to 493.08 points, a 1.5 percent increase over April and 48 percent higher than a year ago.
Regional gaming operator Ameristar Casinos, which is headquartered in Las Vegas, saw its average daily stock price jump more than 17 percent, while the average daily share price of MGM Resorts International climbed almost 11 percent.
MGM Resorts, which completed a listing of 20 percent of its Macau hotel-casino last week on the Hong Kong Stock Exchange, impressed investors by reporting improvement in revenue and its Las Vegas hotel operating statistics during the first quarter.
On Tuesday, Jefferies & Co. increased its price-per-share target on MGM Resorts to $19. The investment house said the Hong Kong stock offering, which left the company with a controlling 51 percent ownership in the MGM Grand Macau, would allow the company to realize more profits from Macau.
"Our takeaways from meetings in Macau and Singapore suggest that robust visitation and revenue trends should continue for some time," Jefferies gaming analyst David Katz said. "While uncertainty still remains regarding development in Cotai and Singapore markets, our view is that those operators who execute and navigate the cultural dynamics of their respective markets will have the most to gain."
Las Vegas Sands Corp., the only American gaming company operating in both Macau and Singapore, saw a nearly 6 percent decline in its average daily stock price during May despite a 58 percent increase in revenue and a doubling of cash flow during the first quarter.
"The company's Las Vegas operations did not fare as well during the quarter as a low hold rate on table games negatively impacted results by approximately $45 million in revenue," Gordon said.
Katz said near-term trends in Macau and Singapore remain stronger than expected and the longer-term prospects were positive.
"Singapore should continue to be a compelling market in terms of profitability and returns, irrespective of market share," Katz said.
Wynn Resorts Ltd., which operates two Macau casinos, saw its average daily stock price climb more than 4 percent.
Slot machine maker WMS Industries was the only other gaming company to see its stock price slip in May.
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