Monarch Casinos Stock: A Small-Cap Casino Play
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In all my travels, I’ve never been to Las Vegas.
It’s something I want to do, but not for the reasons you might think.
I’m not a gambler.
Granted, I’m pretty good at Texas Hold ‘em … but not to the point where I want to throw down hundreds of dollars playing.
Millions of Americans do love to gamble, however.
This chart shows the U.S. gambling industry’s revenue growth:
Statista expects the industry’s revenue to increase 29.3% from 2014 to 2024.
Today’s Power Stock owns and operates casinos in the U.S.: Monarch Casino & Resort Inc. (Nasdaq: MCRI).
MCRI is a $1.6 billion company that owns two casinos:
- Atlantis Casino Resort & Spa in Reno, Nevada.
- Monarch Black Hawk Casino in Black Hawk, Colorado.
MCRI scores a “Strong Bullish” 97 out of 100 on our Stock Power Ratings system. We expect it to beat the broader market by 3X in the next 12 months.
MCRI Casino Stock: Great Quality, Growth + Momentum
Monarch Casino & Resort had a strong third quarter.
Here are two high points:
- Reported revenue of $133.7 million — up 20% year over year.
- For the first nine months of 2022, revenue was $357.3 million — up 25.7% over the same period last year.
These sales figures show why MCRI is a great growth stock. It scores a 98 on that factor in our Stock Power Ratings system.
It’s also an outstanding quality stock: MCRI’s return on equity is 18.1%, compared to the hospitality services industry average of negative 3%.
MCRI’s gross margin is 54.5%. By comparison, the industry average is 34.7%. This tells us company management knows how to keep profits rolling in.
The stock earns a 94 on our quality metric.
Over the last 12 months, MCRI stock is up 16.1%, compared to the hospitality services industry average decline of 10%.
I want to focus more on what the stock has done since September.
After it reached a 52-week low, the stock has run up 53.7% through November. That’s the “maximum momentum” we love to see in stocks.
Monarch Casino & Resort stock scores a 97 overall on our proprietary Stock Power Ratings system.
That means we’re “Strong Bullish” and expect it to beat the broader market by at least 3X in the next 12 months.
From sports betting to card games, gambling is getting more popular in the U.S.
Despite its smaller portfolio of casinos, MCRI has healthy margins and a strong bottom line.
That makes this casino stock a great addition to your portfolio.
Stay Tuned: A 97-Rated Aerospace Expert
Remember: We publish Stock Power Daily five days a week to give you access to the top companies that our proprietary Stock Power Ratings identify.
Stay tuned for the next issue, where I’ll share all the details on a “Strong Bullish” power stock that designs and manufactures critical components for the aerospace industry.
Safe trading,
Matt Clark, CMSA®
Research Analyst, Money & Markets
