Pimco's Kiesel: 'Buy Everything You Can' in Gaming Companies

Friday, 08 Aug 2014 07:43 AM

By Dan Weil

  Comment  |
   Contact  |
  Print   |
    A   A  
  Copy Shortlink
While the stock and bond markets may be dicey overall at this point, Mark Kiesel, deputy chief investment officer at Pimco, likes the gaming industry.

Companies in that sector are growing fast, stock prices are cheap and bond yields are high, he tells CNBC.

In particular, Kiesel favors MGM Resorts, Wynn Resorts, Las Vegas Sands and Melco Crown Entertainment. "Buy everything you can in these companies," he urges.

Editor's Note:
Seniors Scoop Up Unclaimed $20,500 Checks? (See if You qualify)

Their stocks are trading about 10 to 11 times earnings before interest, taxes, depreciation and amortization (EBITDA), their bonds yield about 5 to 5.5 percent and the companies will grow by double digits during the next several years, Kiesel notes.

"These companies throw off significant free cash flow, organic deleveraging power. You want to own the entire capital structure in these companies."

Kiesel sees MGM Resorts as a play on the "amazing" Las Vegas recovery, as it holds 42 percent of the city's room supply. Wynn Resorts "has the potential to grow EBITDA 40, 50 percent over the next two years. There's no kind of growth like that out there," he insists.

He likes Las Vegas Sands as a play on the mass gaming market since 88 percent of its exposure is in Asia, and Macau-based Melco Crown is likely the cheapest of these companies, trading at 10 times earnings.

As for MGM, Morningstar analyst Adam Fleck is impressed with the company's leadership.

"After the disastrous tenure of former CEO Terry Lanni, who nearly drove the company to a bankruptcy filing, new CEO Jim Murren has led perhaps the most remarkable turnaround in the history of the casino industry," Fleck writes on Morningstar.com.

"Murren has focused on increasing returns on invested capital at existing properties, expanding in China and using free cash flow to pay down debt."

Editor's Note: Seniors Scoop Up Unclaimed $20,500 Checks? (See if You qualify)

Related Stories:

© 2014 Moneynews. All rights reserved.

  Comment  |
   Contact  |
  Print   |
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
Zip Code:
Privacy: We never share your email.
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
You May Also Like

Meredith Whitney's Hedge Fund Reportedly in Turmoil

Saturday, 20 Dec 2014 11:43 AM

The hedge fund Meredith Whitney started last year after she became one of Wall Street's best-known analysts is in turmoi . . .

Yellen’s Patience Echoes Greenspan 2004 Run-Up to Rate Liftoff

Saturday, 20 Dec 2014 11:40 AM

Federal Reserve Chair Janet Yellen is taking a page from predecessor Alan Greenspan's 2004 playbook, a step that appears . . .

John Kasich 2016: 7 Key Political Positions of GOP Presidential Hopeful

Friday, 19 Dec 2014 22:22 PM

John Kasich has been involved in the national scene since the 1980s as a U.S. congressman and popular governor from Ohio . . .

Most Commented
Top Stories

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

America's News Page
©  Newsmax Media, Inc.
All Rights Reserved