This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Will Casino Stocks Crap Out in 2013?

NEW YORK (TheStreet) -- I am a sucker for gaming stocks. I admit it; I simply like the idea of owning a piece of "the house."

It isn't the glamour and neon lights that I find very captivating (well maybe a little); it's the complete flexibility in customer service methods I find key. Each customer represents so much profit, casinos are able to go well beyond what almost every other business can spend.

The mountains of cash are entrancing for customers and shareholders. Between the choice of the customer or house, unequivocally I'll take the house every time.

Furthermore, casinos offer another advantage over many other industries; it's relatively easy to know how well a casino is performing. Due diligence is not a lot more difficult than slipping on tennis shoes and taking notes as you walk around.

Total due diligence is much more than walking around and observing the casino floor; however, if you walk the floors of enough casinos enough times, you have an opportunity to stay ahead of the curve.

For some companies though, including MGM Mirage (MGM), Wynn Resorts (WYNN) and Las Vegas Sands (LVS), a simple walking tour may require a trip to Asia.

The Energy Wheel

It may at first glance appear unrelated, but natural gas will increasingly influence the gaming industry's earnings. Natural gas prices are so low that transportation is migrating from gasoline and diesel toward natural gas as a fuel source.

UNG ChartUNG data by YCharts

Natural gas is represented by United States Natural Gas ETF (UNG); if your car was powered with natural gas instead of gasoline, the cost for fuel would feel like $2.25 a gallon.

A significant bonus with using natural gas is the production is domestic for the most part. The result is a significant reduction in imports and an improvement in our balance of trade.

Fuel prices drive the economy and the economy drives the profitability of U.S.-based casinos. Low natural gas prices equate to an increase in the total amount of disposable income. UNG currently trades near $21 and as long as it remains under $35, consider it bullish for the U.S. economy.

1 of 5

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,982.59 +22.02 0.13%
S&P 500 1,978.91 +0.57 0.03%
NASDAQ 4,444.9090 -4.6550 -0.10%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs