Stakes Get Higher for Boyd Gaming

Similar to the way Mandalay Bay expanded the southern end of the Strip in the 1990s, Gordon expects the "build it, and they will come" philosophy to translate into success to the north at Echelon.

Nonetheless, bearish sentiments on Boyd remain. Ed Sheidlower, a portfolio manager with Bryce Funds, recently sold off his firm's stake in Boyd and other casino stocks partly due to macro fears about the gaming industry, but also because of issues he saw developing in Boyd's last few earnings reports.

"The last few reports on Boyd have shown fewer gamblers, more competition and a loss of market share," Sheidlower says. "We were concerned with the latest earnings level and the possible slowdown in their growth rate."

Bryce Funds, which most recently held the stock in a hedge fund-like private account, sold off its Boyd shares in April after the earnings announcement, when the stock was trading just under $50. With shares now just under $39, the move appears shrewd.

Nonetheless, if Boyd approaches an area of technical support in the mid-30s, Sheidlower might contemplate a re-entry. "If it keeps dropping, I'd start to look again," he says.

"I just worry a little bit. This space continues to get affected by terrorist issues, dollar issues. It can be a pretty fickle area," he says.

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