Steve Wynn's Big Cashout: Activist

Updated with Wynn closing stock price.

NEW YORK (TheStreet) -- Steve Wynn and his chief operating officer are pushing back from the table.

Since the end of July, Steve Wynn has sold $114 million worth of shares in Wynn(WYNN Quote) and his Chief Operating Officer Marc Schorr has sold over $7 million. It's the first time in the last decade that Wynn has sold such a large chunk of shares. For Schorr, the proceeds from his sale exceeded his average annual total compensation over the past three years.

For these casino operators, their sales might be a canary in the coal mine to other investors to take some profits on the gains in this sector since the March lows. Since March 9, Wynn is up 343%, MGM(MGM Quote) is up 480% and Las Vegas Sands(LVS Quote) is up a whopping 886%.

The valuations are rich, with Wynn sporting an 80 times forward price-to-earnings ratio, with Las Vegas Sands at 60 times. Meanwhile, Wynn carries a debt load of $4 billion and a meager free cash flow of $456 million. Las Vegas Sands is saddled with $11 billion in debt and $242 million in free cash flow. Forward P/E figures weren't available for MGM, but it has $12 billion in debt and $885 million in free cash flow.

Wynn's stock price is virtually unchanged from a year ago. Is the forward-looking prognosis for this sector really the same today as back then? Just a few days ago, MGM's mega-project, City Center, announced that over 160,000 applicants swamped their job fair for 12,000 positions. That suggests to me that -- while Vegas may still remain a playground for celebs and the super-rich -- the regular consumer will find it difficult to splurge for a trip to Sin City for the foreseeable future.

Shares of Wynn closed at $67.35, down $1.29, or 1.9%.