With 18 trading days left in June after today, there is still plenty to be determined about the monthly performance of the overall market. But if past performance is any indication, casino stocks may have difficulties this month.
Three casino stocks are among the 25 S&P 500 members that have underperformed over the last ten Junes; Wynn Resorts (NASDAQ: WYNN) is the worst performer among the three in the sixth month of the year.
"According to data from Schaeffer’s Senior Quantitative Analyst Rocky White, Wynn Resorts is the third worst stock on the S&P 500 Index (SPX) to own in June, looking back over the past 10 years. The shares averaged a loss of 3.1% for the month over the last decade, and finished the month lower seven times,” noted Schaeffer’s Investment Research.
In the S&P 500, Wynn has performed the poorest in June according to median returns over the last ten years.
Fascinating Seasonal Pattern for Casino Stocks
Regarding the seasonal patterns observed in June, there's an intriguing component. The summer travel season officially begins on Memorial Day, but June is usually a poor month for travel and leisure stocks.
Cruise liner Royal Caribbean Group (NYSE: RCL) and travel website Booking.com (NASDAQ: BKNG) have joined Wynn as the three poorest performers in the S&P 500 for the sixth month of the year. June's worst-performing equities over the previous ten years also include two more pure play companies in travel and leisure.
This weakness may be interpreted as evidence of market efficiency and proof that common sense investment theories—like purchasing a stock because summertime casino attendance is higher than usual—aren't necessarily true. In actuality, their perspectives are punishable.
The energy sector's historical weakness in the summer is another illustration of that trend. Though it's common knowledge that demand and prices for gasoline rise as the summer travel season gets underway, traditional energy equities frequently underperform in the latter half of the second quarter and early third quarter.
MGM June Casino Stock Offenders, Caesars, Too
That expectation that more people will visit the Las Vegas Strip and other casinos in June does not always translate into equity upside is confirmed by the fact that MGM Resorts International (NYSE: MGM) and Caesars Entertainment (NASDAQ: CZR) are two of the worst-performing S&P 500 stocks in June.
According to Schaeffer's, the two biggest Strip operators, MGM and Caesars, have lost an average of 0.95% and 1.72% in June during the last ten years.
With only Wynn having suffered a worse loss in the S&P 500, Caesars' median June loss over the last ten years is excellent for second-worst.