How to Invest in Casino Stocks

By Linda Emma

  • Overview

    The gambling mantra that the house always wins can be sorely tested in a slumping economy. However, for the investor who pays heed to the old adage, buying casino stocks in a down market can yield solid long-term profits. The key is to choose wisely, and as in any investment decision, make it rationally. Take time to do the research and consider your options.
    Slots of Action in Investing
  • Betting on the House

    • Step 1

      Open an investment account. The Internet has made opening brokerage accounts easier than ever (see Resources below). Once you've chosen an investment firm, set up an account online. Be prepared to provide your social security number, bank information and funding for your initial trades.

    • Step 2

      Look at the casinos with which you are most familiar first, then determine whether they are publicly traded or privately owned. Still a mecca for gamblers from all over the world, Las Vegas is a good place to start. Go to the Resources section below for a list of publicly traded companies registered with the Nevada Gaming Commission.
    • Step 3

      Consider the largest, most stable companies such as Wynn Resorts (Nasdaq: WYNN), Lakes Entertainment (NYSE: LACO), Melco PBL Entertainment (Nasdaq: MPEL), MGM Mirage (NYSE: MGM) and Las Vegas Sands (NYSE: LVS).
    • Step 4

      Research individual companies by looking at their holdings and corporate structures. Before you invest any of your money, you want to look at the consistency of their stock price, per share earnings history, rate of growth, investment capital and overall price-to-earnings ratio. Also, consider who is at the helm, and whether the team has a solid investor-friendly track record. While this is all research you can do on your own, most brokerage firms have user-friendly research tools that even include sell-hold-buy advice from stock analysts.
    • Step 5

      Choose one or more companies in which to invest. Access your brokerage account online or talk with a representative over the telephone. Indicate the action (buy), the stock symbol, the number of shares you wish to purchase and the "limit" or price you are willing to pay. Once you have reviewed your choices, submit the order. You will then receive a prompt to confirm your order. If you are certain you wish to proceed, confirm.
    • Step 6

      Wait for confirmation. Once you have placed the order, it will be filled at the next available trade and you will receive confirmation. You can monitor the order status through your brokerage account or wait for an email confirmation.
    • Skill: Moderately Challenging
    • Tip: You can track your investment through your brokerage account or on any of the free real-time quote sites online.
    • Warning:
    • Do not invest money you cannot afford to lose. Placing your money with even the most reputable firm is putting your money at risk. Stocks are not insured, and your money is committed until you choose to sell your stock.

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