Monday, October 22, 2012

2-Star Stocks Poised to Plunge: Wynn Resorts?

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, casino operator Wynn Resorts (Nasdaq: WYNN  ) has received a distressing two-star ranking.

With that in mind, let's take a closer look at Wynn's business and see what CAPS investors are saying about the stock right now.

Wynn facts

Headquarters (founded) Las Vegas (2002)
Market Cap $14.0 billion
Industry Casinos and gaming
Trailing-12-Month Revenue $5.2 billion
Management Founder/Chairman/CEO Stephen Wynn
CFO Matt Maddox
Return on Equity (average, past 3 years) 14.8%
Cash/Debt $1.9 billion / $3.1 billion
Dividend Yield 1.7%
Competitors Caesars Entertainment
Las Vegas Sands
MGM Resorts International

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 29% of the 1,239 members who have rated Wynn believe the stock will underperform the S&P 500 going forward.

Late last year, one of those bears, Jeffrey2012, voiced concerns over Wynn's big bet on Macau:

This feverish pitch of ever record setting revenues coming from Macau will come to an end sooner rather than later. There is no way that Macau and China is going to continue their hot growth without some sort of issues. In fact, there are signs everywhere from the credit squeeze in Wenzhou to the plummeting stock market. Sooner, rather than later is this going to manifest in these wealthy high rollers who are probably living the high life on shadow banking loans.

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