#6 - Eldorado Resorts (NASDAQ:ERI)
With their crowded gaming floors and high-touch surfaces, casinos would seem to be one of the least likely bets among travel stocks. But it’s a bet you should be willing to take with Eldorado Resorts (NASDAQ:ERI).
Prior to the outbreak of the novel coronavirus, Eldorado was in the process of buying out Caesars Entertainment Corporation. This is significant because Caesars is the “official casino partner” of the National Football League (NFL). And if I had to make one bet on the future of live sports in the United States, it is that the NFL will be playing football in the fall.
In addition to its affiliation with the NFL, Caesars is also the official supplier of betting odds for both ESPN and Turner Sports. And when the buyout is complete, ERI will have access to a network of sports books that is spread out among 29 casinos in nine states.
This is a presentation about stocks for you to buy and hold. And patience will be required if you’re going to own ERI stock. But with the stock trading at nearly 25% of the price it was at to start the year, the stock appears to be giving investors a great entry point. Even if the casino industry takes a while to come back, the company should get a nice lift from the sports book side of things.
About Eldorado Resorts
Eldorado Resorts, Inc operates as a gaming and hospitality company in the United States. It owns and operates Eldorado Resort Casino Reno, a hotel, casino, and entertainment facility; Silver Legacy Resort Casino, a themed hotel and casino; Circus Circus Reno, a hotel-casino and entertainment complex; Eldorado Resort Casino Shreveport, a hotel and tri-level riverboat dockside casino; Mountaineer Casino, Racetrack & Resort, a hotel, casino, entertainment, and live thoroughbred horse racing facility; Presque Isle Downs & Casino, a casino and live thoroughbred horse racing facility; and Eldorado Gaming Scioto Downs, a modern racino.
Read More - Current Price
- $37.56
- Consensus Rating
- N/A
- Ratings Breakdown
- 0 Buy Ratings, 0 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- N/A
It’s hard for many Americans to see it right now, but the global economy will recover. The travel sector may be one of the lagging indicators. And even within specific industries (hotels, airlines, etc.), some companies will recover faster than others.
Former Federal Reserve chairman Ben Bernanke likened the current crisis to a severe winter storm, or other natural disaster. Essentially, Bernanke is repeating what some other analysts have suggested. That is, while the economic destruction is harsh, the recovery may be equally as swift.
However, right now any recovery will “follow the science” and the science is conflicted on the matter. While it’s becoming more and more certain that the intense social distancing (i.e. mitigation) efforts taking place throughout the country have had some effect in “flattening the curve”, it won’t be “business as usual” until there is a vaccine for the novel coronavirus.
But somehow, someway, the economy is going to reopen. And when it does, the travel companies will be ready to greet travelers with open arms. And that will be good news for investors.
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