Casino operators hit the jackpot with the election of Donald Trump.
Since Election Day, consumer confidence has soared. Casino stocks were a big beneficiary. They rallied, as investors bet that Trump policies would boost the economy and give everyday Americans a lift.
U.S. regional casino operators like Boyd Gaming (BYD), Penn National Gaming (PENN), MGM Resorts (MGM) and Red Rocks Resorts (RRR) are up between 6% and 15% since Trump’s victory.
“Clearly my stocks are very economically sensitive,” says Hedgeye Gaming, Lodging & Leisure analyst Todd Jordan, “so if you believe a Trump administration is going to do a good job for the economy my stocks will probably do well.”
The calculus is simple. If gasoline prices don’t skyrocket, jobs are created, housing prices go up and GDP gets a boost, Americans will have more money to gamble. This rosy picture stands in stark contrast to bleak and longer-term demographic trends.
“My generation, Gen-X, is the first video game generation. We’re just not interested in playing slots,” Jordan says in the video above. Millennials? You can forget about them playing slots like grandma, he says. It’s not happening.
Watch the video above to hear Jordan weigh the shorter-term macroeconomic picture against this longer-term demographic trend.
