Casino Stocks Set for Rough Waters as June History Repeats Itself


As the calendar turns another page, and summer unfurls her warm hues, casino stocks wade into tricky waters. The nearing completion of today’s business leaves only 18 trading sessions remaining in the month of June. Yet, the imminent volatility leaves a wide avenue of possibilities regarding the broader market’s monthly performance. Echoing the whispers of past years, the odds seem to point towards rough sailing for casino stocks if history repeats itself.

Vegas paints a glittering backdrop to this tale of roller-coaster stocks, particularly singling out the fortunes of Wynn Resorts. This esteemed operator, famed for its Wynn and Encore casinos on the Las Vegas Strip, often finds itself battling choppy waves in June. In fact, Wynn Resorts has emerged as a regular entrant amongst the losing tickers this picturesque season.

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In the grand tableau of market performance, the last decade saw the S&P 500 Index play host to 25 dismal performers. Interestingly enough, three of these were proud casino equities. Wynn Resorts (WYNN: NASDAQ) crowned these fumbling performers, clutching the scepter of defeat each June over the past decade.

Schaeffer’s Senior Quantitative Analyst, Rocky White, delving deep into his database, discovered that Wynn Resorts sits comfortably in the third position of the worst-performing stocks on the S&P 500 during the month known for weddings and roses. This dubious honor is underscored by an average loss of 3.1% over the last past decade. Notably, Wynn’s stocks have concluded June in a state of decline seven times over this same period.

A yarn woven by market numbers places Wynn as the bleakest performer in the June chapter of S&P 500’s annual story, based on median returns the damp past decade delivered.

Amidst these revelations comes an intriguing observation linked to seasonal trends during the summer month of June. As the echoes of Memorial Day events fade and the anticipation of the summer travel season begins, surprisingly, travel and leisure stocks often find themselves left out in the cold.

Suffering a similar grim fate alongside Wynn Resorts during June’s challenging days are the travel booking service, (BKNG: NASDAQ), and the cruise titan, Royal Caribbean Group (RCL: NYSE). Two other stocks aligned with the travel-leisure industry also feature on June’s Wall of Shame over the past decade.

Forecasting stock performance based on summertime casino visitation increases, a seemingly logical assumption, frequently proves an incorrect strategy. An example amplifying this trend is the seasonal weakness of the energy sector during the golden days of summer. Although the escalating demand and rising prices of gasoline during the pulsating summer travel season seem to suggest otherwise, traditional energy equities often falter in the concluding days of the second quarter and the onset of the third.

The theory that June’s increasing casino footfalls translate into equity gains is further debunked by MGM Resorts International (MGM: NYSE) and Caesars Entertainment (CZR: NASDAQ) stock performance. Both of these heavyweight Vegas Strip operators, find themselves among June’s underperformers on the S&P 500 list.

MGM and Caesars, the dynamic duo ruling the Strip, both suffered average June setbacks of -0.95% and -1.72% respectively over the last decade, as Schaeffer’s reveals. Caesars’ median June slump of -3.61% over the last decade is second only to Wynn’s, assuring its uncomfortable spot on the S&P 500’s performers ranking.

As these American operators ride the unpredictable tides of June, the casino equities’ performance remains to be seen. Whether the wheel will turn in their favor or the dice roll will see history repeat itself, is a tale the remaining 18 trading days of June will tell.