There are still some great value stocks out there in the gaming sector. Despite all the instability within core gaming markets including the UK, Macau and the Las Vegas, safe places to park money long term and wait without much worry still exist. If you have a time horizon of 5-10 years or longer and want to build some wealth without trading in and out and sweating over daily price movements and political shakeups, here’s your checklist:
1) Stock at or near lows. You can’t buy low, after all, without actually buying low. Shares should be at lows for external reasons, having nothing to do with the company itself. Gambling companies are hit all the time with regulatory surprises, new taxes, punitive measures involving problem gamblers and protection schemes, problems obtaining licenses for one reason or other, etc. As long as the ruling reason for a decline in the stock is external to the company, it’s a buying opportunity
2) High dividends with little to no danger of suspension. They can wobble from quarter to quarter, but basically they’re there to stay. If the company is still making good money despite regulatory issues, even if it’s making less money than before, chances are good that it will eventually recover.
3) Iron balance sheet. Debt-fueled growth is only a good strategy if it’s short term in order to take advantage of opportunities that come around only rarely. In today’s super-cheap-money world, we see way too many companies that incorporate debt into their business models intrinsically and just keep rolling it over. It can keep their shares high for a long time but not forever. If you’re a trader, these sorts of momentum plays are nice to play around with. If you’re looking for a place to park capital and forget about it, move on with your life and check back when you’re retired, then not so much.