Sin Stocks Are Still Holding Up

Late in August, we highlighted Resorts and Casinos, and emphasized that despite pervading weakness in the general market, these "sin stocks" were somehow able to keep going. And keep going, they did. While the broad market rolled back and forth, looking for solid ground, these stocks just kept moving higher. Since July, Wynn Resorts (WYNN@WYNN | Quote | Chart | News | PowerRating) has gained around 70%, while Las Vegas Sands (LVS@LVS | Quote | Chart | News | PowerRating) has risen about 75%. The S&P, on the other hand, gained only 1.5% for the same time period. Clearly, these stocks killed the market's performance record for the latter half of the summer, and we were there to watch it happen.

So what happened today? Yesterday, the group had a big day across the board. Today, this group opened lower after LVS announced disappointing results for the company's flagship Chinese casino, Macua. Wynn also has plans to open up new casinos in the Asian marketplace, but these disappointing Macua numbers could dampen any short-term optimism.

The Resorts and Casinos group has a PowerRating (for Industries) of 8. From 1996-2006 industries with a PowerRating (for Industries) of 8 have achieved average annualized returns of 20.26%. By contrast, groups with a PowerRating (for Industries) of 10 have achieved an annualized return of 35.27% based on 3-month historical returns. A PowerRating (for Industries) of 8 is an excellent PowerRating, and this group has shown its ability to hold up despite an overall negative market. It might be a good idea to view today's losses as an opportunity for cheap prices in a hot group.

Las Vegas Sands has a PowerRating (for Investors) of 5.

Wynn Resorts has a PowerRating (for Investors) of 5.