With one hand of cards, a gambler can beat the house or lose it all. Wells Fargo Analyst Cameron McKnight is familiar with the gambling scene, playing stocks such as, Penn National Gaming (PENN), Gaming and Leisure Properties (GLPI) and Churchill Downs (CHDN). However, he didn’t earn his spot at number 77 out of 2336 analysts by blindly guessing. Cameron earned his +7.7% average return through research, experience, and a 77% success rate of recommended stocks.
Cameron’s most successful recommendation of 2013 was BUY Melco Crown Entertainment Limited (MPEL). After reviewing visitor trends to the gambling destination Macau, Cameron noted, “Macau mass growth accelerated in July. Data we track also suggest economic sentiment among high-income Chinese consumers (those likely to visit Macau) remains strong, likely a result of an improving service sector.” Cameron’s recommendation ended up earning him +21.0% over S&P-500!
Cameron continued to see success with MPEL later that year in November when he recommended BUY MPEL. Cameron noted, “Based on trends through November 10, we estimate Macau gaming revenue growth for November is trending between 19-21% yr/yr.” With confidence in the Macau market Cameron was able to earn +19.7%.
And, just like every high roller has a few losses, Cameron also experienced a few failed recommendations including, a recommendation to BUY Penn National Gaming (PENN). Cameron felt that PENN shares were “deeply undervalued” arguing, “1) PENN is currently trading at an significant discount to peers…2) valuation overlooks PENN’s options to create value through unit growth, supported by its balance sheet and strong FCF profile; and (3) estimates and industry trends should stabilize next year, given limited supply growth until 2016 and well known risks in the Midwest.” Unfortunately, despite Cameron’s sound arguments, he walked away with -16.4% over S&P-500.
Cameron is currently on a winning streak, most recently earning +11.9% when he recommended BUY Wynn Resorts. Wynn is one of his favorite stocks noting, “its exposure to Macau, its growth options, and its valuation given its return of capital.”
To see if Cameron continues to take home the big wins, and to follow other analyst recommendation performances, be sure to download TipRanks, and start listening to financial advice you can trust.
