By Brendan Conway
There&’s an exchange-traded fund for casino and gaming stocks, and it&’s seeing heavy trading volume after Las Vegas Sands&’ (LVS) first-quarter earnings report. Shares in the proprietor of The Venetian are selling off despite a pretty strong showing in that report, losing 4.8% to $55.98 recently.
The Sands selloff is puzzling until you hear about the earnings call. As my colleague Avi Salzman noted here earlier, Nomura Equity Research analyst Emily Cleary Harry Curtis made a boxing analogy as she called the tone of that call &“contentious.&”
- AP
- Playing a hand on the gaming ETF.
The problem: Management was apparently less than eager to hand over the new info many investors wanted. That includes the early trends at the Sands Cotai, the company&’s fourth Macau casino. &“Expectations for LVS have been high,&” Cleary wrote. &“If results at Sands Cotai are slow to build, we have little doubt that there could be temporary downside.&” Bank of America Merrill Lynch analysts Shaun C. Kelley and Matthew A. Cole mentioned the reluctance to talk in a Thursday note and added that they were dialing back estimates for the Cotai efforts.
The Market Vectors Gaming ETF (BJK) has pared its early loss and is currently down 0.3% at $36.60 in afternoon trading. Trading volume is the heaviest in about two months, according to FactSet Research Systems. This ETF carries an LVS weighting of nearly 17%, which is more than twice the next biggest stock, Wynn Resorts (WYNN), at 7%. There was clearly some morning selling pressure in sympathy with the Sands slide, but the bargain hunters and speculators have moved in midsession.