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Casino Stocks Amongst Bests of 2004

"…Harrah's Entertainment gained 34 percent and the company it is buying, Caesars Entertainment soared 86 percent. MGM Mirage surged 93 percent while the company it is in the process of acquiring, Mandalay Resort, shot up 58 percent.

"And in a smaller deal, Penn National Gaming increased 162 percent while the company it is purchasing, Argosy Gaming, increased 80 percent.

"…Shares of Wynn Resorts, which doesn't even have a casno open yet, skyrocketed nearly 140 percent. And Las Vegas Sands, which went public last month, is up 65 percent since the IPO.

"…'You are coming off a banner year and comparisons are more difficult. There's no doubt about that,' said George Smith, an analyst with Davenport & Co. 'But there appears to be a consensus of 3 percent to 4 percent GDP growth in 2005 and with that backdrop, leisure and recreation companies should have a good year.'

"According to data from Thomson/Baseline, the average estimated earnings increase for a basket of 10 mid-cap and large-cap casino companies in 2004 was 36 percent and profits are expected to rise another 15 percent, on average, in 2005.

"…The relatively weak dollar is another plus as it should make travel to the United States more attractive for international tourists.

"…So which casino stocks give investors the best odds of a big payday this year? Analysts said that the group as a whole should do well but that investors shouldn't count on as much takeover activity to lift the sector this year. So it will pay to be more discriminating…"

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