Anyone who has been to Las Vegas knows that the majority of properties one will stay at is owned by one of a handful companies, with Caesar's Entertainment Corp. formally one of the big players. In June, Eldorado Resorts Inc. (NYSE:ERI) announced it had agreed to purchase Caesar's Entertainment for a whopping $8.5 billion U.S., cementing the gaming company's fortunes as a juggernaut in the U.S. gaming industry.
Shares of Eldorado have waned since the acquisition announcement, down nearly 30% over the span of a little more than two months. The gaming giant is now priced reasonably well, with its valuation down near the 30-times earnings threshold, making it an interesting company to keep an eye on in the months to come.
Of course, gaming is an industry which gets hit harder than others in poor economic times, making these companies super cheap in downturns. I would recommend putting Eldorado on your watch list, and seeing what happens (economically speaking) over the next few quarters. If we do indeed see a recession materialize, investors may be able to pick up shares of Eldorado or its peers for significant discounts.
Patient long-term investors know the value of sitting and waiting in the weeds. Having a list of companies to buy at a discount is of paramount importance, when timing investments in companies that operate in cyclical industries, such as gaming.
Invest wisely, my friends.
