Casino stocks have been a mess of late, but new strong insider purchases may help to eventually create a floor in the sector.

Wynn Resorts

(WYNN) - Get Report

, which operates luxury casinos in Las Vegas and Macau, bounced off a new 52-week low Monday following a recent $1.7 million stock purchase by one of the its directors.

Several buy-side sources have said Wynn and other stocks in the sector look very attractive at these levels but worry that momentum hedge funds will continue to short the group, since there is a lack of positive news flow expected.

The casino stocks have sold off sharply this year as investors fret about weakening results in Las Vegas, along with growing competitive pressures in Macau. The sector continues to lose bullish analyst support each week.

On Monday, UBS analyst Robin Farley cut her price targets on several casino owners as she argued the stocks should trade at lower earnings multiples because of increased uncertainty related to profits in Vegas and Macau.

Squashing those fears would be strong insider buying -- which is considered a positive signal that stocks are trading at attractive, undervalued levels.

John Moran, a Wynn director, purchased 20,000 shares at $84.52 and $85.07 apiece last Thursday, according to a

Securities and Exchange Commission

filing after Friday's market close. This was the largest open-market purchase by insiders at the company in nearly two years, according to research provider InsiderScore.

After hitting a new 52-week low of $77.66, Wynn shares rose 1.9% to close Monday at $81.35. The stock is sharply off its 52-week high of $176, set back in October 2007.

At UBS, Wynn's price target was cut from $118 to $93,

Las Vegas Sands

(LVS) - Get Report

was cut from $74 to $55, and

MGM Mirage

(MGM) - Get Report

was cut from $54 to $39.