Chad Beynon is a Senior Vice President and Senior Analyst who has been with Macquarie Group Limited since 2007. He conducts research and publishes reports on all gaming, lodging and movie theater companies, and is the Head of Consumer at the firm.
In 2012, Mr. Beynon received Institutional Investor’s Rising Stars of Wall Street in gaming and lodging, voted by corporate clients. Prior to joining Macquarie Group Limited, Mr. Beynon worked at Prudential Equity Group covering the beverage sector, followed by the gaming sector. Mr. Beynon graduated from the University of Maryland, double majoring in finance and logistics/supply chain management.
In this 2,751 word interview, exclusively in the Wall Street Transcript, Mr. Benyon details the evolving sports betting sector for investors.
“2018 started out well, and then, it finished very poorly mainly on the back of, I’d say, two items. One, the fear around the potential increase of interest rates. My companies carry a significant amount of debt, some of which has floating interest rates; therefore, investors began to worry about free cash flow adjustments should the Federal Reserve increase rates.
And then, the second item had to do with higher wage increases, which really began to increase in the last 18 months. While there are clearly benefits to the top line given a healthier consumer, investors became concerned around margin expansion deceleration. As a result of these two factors and a few nuanced fundamental declining items, the stocks performed poorly.”
The real upside is in expanding legalization:
“In addition, another major positive for U.S. casinos stocks is the May 2018 repeal on the ban of sports betting. So now, in certain states, actually six states to be exact, you can place a wager on a sporting event, and that is brand new in the United States, outside of Nevada.
It’s a very big market in places like the United Kingdom, Australia, Italy, Germany — some of the big, mature, well-populated markets — and we’re starting to see that in the United States. We do need state legislation to enact betting in each state, but as I said, we’ve seen it in six states.
So that’s something that I think will help the overall industry as well. We like Eldorado Resorts (NASDAQ:ERI), Caesars Entertainment (NASDAQ:CZR) and International Game Technology (NYSE:IGT).”
Get more details and more top picks from this award winning equity analyst in his 2,751 word interview, exclusively in the Wall Street Transcript.
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