Produced and maintained by the local business research and advisory firm Applied Analysis, the index was launched in 1998 with a value of 100. The index hit a record high of 667.09 in October. In November, it fell nearly 81 points or 12% to 586.26. In December, the index fell another 16.6 points or 2.8% to 569.67.
Despite the decline in the index in November and December, the stock prices of Las Vegas Sands and Wynn Resorts remained substantially higher than one year ago. Another beneficiary in 2007 was MGM Mirage, which welcomed capital from Dubai World and introduced a clear strategy of leveraging its strong brand identity and commencing a worldwide expansion, says Applied Analysis principal Brian Gordon.
Gaming equipment manufacturers posted mixed results. The market share leader, International Game Technology, posted a modest year-over-year decline. Bally Technologies boosted its overall valuation with new and improving technology, according to Gordon.
Also in December, three new companies were added to the index: Penn National Gaming, Pinnacle Entertainment and Ameristar Casinos. Gordon tells GlobeSt.com the move was made to offset the loss of Station Casinos, which was taken private in November, and Harrah's Entertainment, whose privatization is expected to become official early this year.
Along with replacing those companies that are going private the new additions also give the index a broader feel. Before the new additions, the list of index companies included only companies with a significant presence in Nevada, specifically Las Vegas. The three new companies don't currently have gaming operations in Las Vegas, though Ameristar has some in Nevada.
"The overall index is morphing as the market dictates but it is still a gauge of the overall health of the market and its performance from an equity standpoint," Gordon says. "With some of these major players like Las Vegas Sands, Wynn and MGM carrying a lot more weight, having a diverse mix of companies is important to evaluating the overall performance of the sector."
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