A Sanford C. Bernstein analyst suggests that gaming stocks in the Macau SAR are “terribly strong buys,” however investors should be prepared to weather high volatility over the course of the next year.
Bernstein analyst Vitaly Umansky has said that the gaming hub can return to the numbers achieved in 2019 by 2021 – if the economy continues to stay strong.
“At a longer-term perspective, if you look 12 months or 18 months out, all these stocks […] seem to me to be very terribly strong buys at a longer term view. Now the problem you’re going to get is there are a lot of uncertainties over the next couple of quarters through the end of this year,” Umansky told CNBC.
“Buying opportunities exist but in the shorter term we will have high volatility. […] I think investors looking into the sector are going to be stuck with fairly volatile security holdings over the next six to 12 months as the recovery slowly progresses,” he added.
The analyst attributed the 97% year-on-year gaming revenue plunge to the travel restrictions imposed by the central government and Hong Kong, which has left Macau with very few players. Once travel restrictions are lifted, Umansky expects that these numbers will quickly start to escalate. LV
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