2015 is coming to an end and it’s time for a review of investment calls this year. I went through all of this year’s articles and picked out the ones with explicit investment or trading recommendations. As usual there were wins, losses, and washes. Let’s begin with the losses first.
Losses
On January 13, I wrote positively on Genting, saying:
Genting’s financial situation coupled with the seemingly resilient Filipino economy that apparently can even take a money supply crash from 25% to 4% annual growth, all signal that Genting will be breaking to the upside fairly soon.
Genting is down 16% since then, so I was clearly wrong about that.
On March 24th I said it was safe to go long Melco but short term with the finger on the sell button. Though this was not an enthusiastic prediction to say the least, it was in response to Brean Capital’s bullish call on Macau. Melco did bounce very minorly for about a month into April and then continued down, but timing these kinds of moves is impossible so I chalk it up a loss. Melco is down 29% since March 24th.
On July 7th, I recommended going short Churchill Downs even though it is a good company:
My call on Churchill Downs for now is, regrettably, to go short. And once money supply starts moving seriously again, cover, wait two months, and go long. The company itself can handle the worst. It has already proven that. But the stock is still bobbing on the surface of the waves.
CHDN is up 12% since, so that’s another loss.
On May 5th I wrote that Nagacorp is a good choice if scaled in on down days, not for capital gains but for dividend income. Nagacorp is still down 14% since then, so I have to chalk this one up as a loss.
Finally, in mid August I suggested a 70-30% split on Echo entertainment and Crown Resorts for those looking to invest in Australia. Echo is now Star Entertainment. Both are down 5% since then.
Missed Opportunities
There were also times when I did not make any explicit calls but stocks moved up or down significantly. First was Intertain. About them, I had said on February 24th :
Intertain is a good company, but macro conditions right now are too dicey to take any positions. When the dust settles and we know one way or the other what happens with the Euro and what happens when and if the Fed raises interest rates, Intertain will be a top pick.
At least I didn’t say buy it. Intertain is down 42% since then.
Perhaps the worst missed opportunity of 2015 was NetEnt. While being generally positive about the company and its accomplishments and finances, I was wary of its location so recommended staying away. Well, NetEnt shareholder have the last laugh here as the stock is up almost 100% since March 17th.
Gains
Fortunately, correct calls outweigh the losses this year. Way back on January 6, I said this:
As for Melco, now is still not the time to take any position. Morgan Stanley (MS) came out with a forecast of a Macau turnaround as early as this month, but that won’t happen, not in the current environment.
Since then, Melco is down 29%. It is still not a good time to invest in Macau stocks. Perhaps sometime in 2016 it will be.
On January 20th I recommended shorting Caesars. The stock is down 30% since then. Caesars is going to be very jumpy for a while because it all depends on court cases. If you remain short it’s a good idea to cover and leave it alone.
One week later on January 28, I said that Wynn will continue trending down with the rest of its competitors. WYNN is down 56% since that day. When Macau recovers, Wynn will be one of the best investments of the group. But it isn’t now.
On February 10th, I had nothing positive to say about Scientific Games.
In most cases there is at least something positive to say about a company, but I’m hard-pressed to find one here. Bally should have stayed independent. It was doing well, and now it’s attached itself to a company drowning in debt and unable to claw out a profitable quarter.
SGMS is down 33.5% since February.
In the same article, I was neutral about IGT, and IGT hasn’t really gone anywhere since.
I have always been positive on 888 since March 3 when I first covered them, and believe it should be one of the larger allocation in any gaming portfolio. The stock is up 16% since. Continue to hold if you own it, this is a long term stock.
Betsson I first covered on March 10. I wrote:
The pattern from here on out for Betsson should be a continued uptrend with short plunges in response to negative Eurozone developments, but otherwise looks safe until 2018.
That is pretty much what happened. Betsson is up 53% since then, a home run.
On August 25 the day after the Black Monday crash, I wrote that Las Vegas Sands and Paddy Power were both good defensive holds. LVS is a wash since having gone nowhere, as one would expect from a defensive stock, but Paddy Power is up 60% since.
We shall see what 2016 will bring.
