Chilton Investment Company lowers its position in Wynn Resorts


Feb. 25 2015, Updated 11:05 a.m. ET

Chilton Investment and Wynn Resorts

Chilton Investment Company started new positions in Sonic Corporation (SONC), Endo International plc (ENDP), Apache Corporation (APA), and Realogy Holdings Corp. (RLGY). It closed positions in FedEx Corporation (FDX) and Priceline Group Inc. (PCLN). Chilton increased position in FleetCor Technologies, Inc. (FLT) and Covidien plc (COV). It decreased positions in Wynn Resorts Ltd. (WYNN) and Timken Company (TKR).

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Chilton Investment Company decreased its position in Wynn Resorts (WYNN), which accounted for 1.25% of the fund’s 3Q14 portfolio when compared to 0.13% in 4Q14. WYNN has a  0.07% exposure to the SPDR S&P 500 ETF (SPY). The ETF tracks the overall performance of 504 publicly traded high growth companies.

Overview of Wynn Resorts

Wynn Resorts (WYNN) is based in Nevada. It develops, owns, and operates casino resorts. It operates through its subsidiaries Wynn Macau and Wynn Las Vegas with casino hotel resort properties in Macau and Las Vegas, respectively.

WYNN earns its revenues through casinos and hotels. It earns revenues from food and beverage, entertainment, and retail operations. Casino revenues represent 75% of WYNN’s total revenues. Food and beverage revenues and hotel room revenues contributed 10% and 8%, respectively, to the company’s total revenue.

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Wynn Resorts declares 4Q14 results, revenues plunge

In February 2015, WYNN declared its 4Q14 results and reported net revenues of $1,138.0 million, compared to $1,519.9 million in 4Q13. The decline was due to a 32% net revenue decrease from its Macau Operations and a 5.8% decrease in net revenues from its Las Vegas Operations.

Net revenues fell 16.9% from the prior quarter. Revenues fell 19.2% in Macau and 11.9% in Las Vegas compared to the prior quarter. Macau’s operations were negatively affected over the last two quarters because of lower VIP gaming activity and a fall in premium mass market players.

For 2014, net revenues were $5,433.7 million, down 3.3% from $5,620.9 million in 2013.

Smoking ban affects Wynn Macau

The Macau government is in the process of submitting a bill to the legislature that would ban smoking in casinos, including VIP rooms. The citizens of Macau will welcome this move since, according to a survey, around 60% of casino employees are averse to working in VIP rooms that allow smoking. About 70% of Macau citizens support a complete ban on smoking.

According to analysts, this ban on smoking has already negatively impacted casinos’ gaming revenues by 10% to 15%. If the ban is extended to VIP rooms, it will significantly impact Wynn Macau’s revenues.


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