by David Fessler, Advisory Panelist, Investment U
Most of us aren’t compulsive gamblers, heavy drinkers, or chain smokers. Three habits that over time, are bad for your wallet and - more importantly - your health.
But from an investment standpoint, the so-called “sin stocks” - companies that make alcohol, firearms, cigarettes and those that operate gambling casinos - are doing quite well.
How well?
The International Securities Exchange SINdex (SIN), an index that solely tracks “sin” stocks, is up more than 30% since January…
This compares to the S&P Retail Index’s gain of just 15%. Against the broader S&P 500 Index, it’s done even better: up nearly 40% in just the past two months. And it’s up nearly 88% since its March low.
Perhaps your personal philosophy isn’t inclined toward vice or sin stocks. And that’s fine - there are plenty of other sectors that are performing well these days.
But for those who want further diversification in a sector that’s highly recession-resistant, you might want to consider investing in a vice or two (as opposed to engaging in them).
Sin Stocks: Rolling the Dice on One of the Biggest Casino Operators in the World
Take casino stocks like Las Vegas Sands (NYSE: LVS), one of the world’s largest developers of integrated, multi-use resorts.
- The company operates the Venetian, the Sands Macao, the Palazzo Resort-Hotel-Casinos, the Sands Expo and Convention Center, and the Venetian Macao in the People’s Republic of China Special Administrative Region of Macao.
- Additional properties under development include the Cotai Strip, a master-planned development of resort casino properties in Macao, the Marina Bay Sands in Singapore, the Sands Bethworks, Pennsylvania’s first gaming resort destination in Bethlehem, PA and the a leisure resort complex on Hengqin Island in the People’s Republic of China.
As of this writing, shares of the Sands have soared 488% from its March low. Even after that impressive run-up, the Sands shares still trade nearly 92% BELOW their $138.93 high of October 2007.
Nine out of the 11 brokerage firms that follow the Sands shares don’t like the company’s prospects, and rate it at a “Hold” or worse. But brokers tend to take short-term views, particularly when things are at their worst.
With Las Vegas Sands, the news is fairly bleak.
