If you're going to gamble on gaming stocks, pick MGM Resorts International (MGM) , says David Katz of Tesley Advisory Group.
He told TheStreet Thursday MGM is his sector favorite for its investments in Macau, the resurgence of the convention and hospitality industry in Las Vegas, and the pending opening of its $1.4 billion casino at the National Harbor just outside of Washington D.C.
Macau is one of the three key areas that will lead gaming stocks higher in the coming weeks. After 26 consecutive months of declines, the Macau gaming region has seen revenue growth for three straight months.
Katz also noted the revival of the Las Vegas Strip and expansion non-traditional gaming markets as catalysts for MGM stock, which trades around $28. "Las Vegas has the strongest momentum of any area. In particular, the Strip is doing well thanks to conventions and the hospitality industry," Katz said.
MGM pointed to its investment in Atlantic City as one of the reasons year-over-year third-quarter revenue jumped to $2.52 billion from $2.28 billion. "The Borgata is the market share leader and strongest casino in Atlantic City," Katz said. "Now they are the sole proprietors of the casino and they are seeing the benefits."
If you don't want to gamble on individual stocks, consider the VanEck Vectors Gaming ETF's (BJK) chart. Over the past six months the index is up nearly 9% and year to date its up nearly 11%.
Las Vegas Sands (LVS) , its Chinese subsidiary Sands China (SCHYF) and MGM Resorts International are the three largest holdings in the fund, with each representing 8.58%, 8.31%, and 7.27% of the fund respectively.