Typically, Wynn Stock does not record victories during the month of June.
Let's dive into the troubles brewing for Wynn Resorts in the upcoming June month, based on historical trends. This well-known casino operator has a questionable track record in June, with the stock sinking more than most other S&P 500 members during this period.
Over the last 10 years, Wynn Resorts (NASDAQ: WYNN) has averaged a June decline of 3.29%, making it one of the worst performers in the S&P 500 during that month while still managing positive showings a mere 30% of the time. If you're wondering why old timers suggest "Sell in May and Go Away," this is a prime example of why. Last month, stocks roared ahead, and Wynn led the pack with a 12.74% surge in May.
However, the effectiveness of the "Sell in May and Go Away" strategy is usually tested by the broader market's performance in the preceding months. In 2024, when the markets rolled in May, the seasonal impact was relatively insignificant. But when the market is negative going into May, the average return drops to -1.6%, and markets barely eke out positive performances half of the time. In essence, bad momentum makes bad seasonality worse.
Beating the June Blues? It's a Long Shot
June weakness in travel and leisure stocks, including Wynn, is a strong sign of market efficiency and a mathematical smack-down for those banking on flimsy investment theses such as betting on increased summer casino visits. Quite the opposite, these outlooks can actually backfire.
Seasonal trends are far from certain, but Wynn has a few potential hurdles to overcome. Escalating US/China trade tensions could put the squeeze on Macau casino stocks, as that's Wynn's largest market. Additionally, any tariff-related panic could dampen US consumer spending, negatively impacting Wynn's Boston and Las Vegas casinos.
If that wasn't enough to gnaw at your investment, keep in mind that analysts have slashed their forecasts for US GDP growth to 1.3% from 2.3%, thanks to pesky tariffs. Any negative impact on earnings growth is especially concerning when the stock market already seems quite overvalued. After an April dip, the forward-looking P/E for the S&P 500 is back at historically high levels, over 20x FY1 earnings.
Bottom line, June could be a decisive test for Wynn Resorts. Here's hoping they can outsmart their unlucky June streak!
[1] Schaeffer's Investment Research[2] Macau Gaming News[3] Yahoo Finance: WYNN Stock Chart[4] TipRanks Consensus: WYNN Analyst Ratings & Target Price Data
Enrichment Data:
- Seasonal trends: June has been a challenging month for Wynn Resorts' stock performance over the past decade, with an average decline of 3.29% and a positive showing just 30% of the time. This is one reason for the "Sell in May and Go Away" strategy (source: Schaeffer's Investment Research).
- Economic conditions: Factors such as economic downturns or slowdowns in consumer spending on leisure activities could negatively affect the hospitality and gaming industry and, by extension, Wynn Resorts.
- Market volatility: The overall market volatility, especially in the casino and gaming sector, can influence Wynn Resorts' stock performance, subjecting it to fluctuations based on broader market trends.
- Competition and regulatory environment: Increased competition in the gaming industry and changes in regulatory environments, particularly in key markets like Macau, could pose challenges for Wynn Resorts' operations and profitability.
- Current market conditions: As of recent data, Wynn Resorts' stock has shown mixed performance, with a 1-month increase of about 7.54% but a 6-month decline of 7.75% (source: Yahoo Finance). Analysts have a positive outlook, with an overweight rating and increased price targets (source: TipRanks).
- Wynn Resorts' stock performance in June has historically been poor, with an average decline of 3.29%, making it one of the worst performers in the S&P 500 during that month.
- Escalating US/China trade tensions could potentially impact Wynn Resorts negatively, as Macau, Wynn's largest market, could be affected.
- The "Sell in May and Go Away" strategy, which suggests selling stocks in May and buying them back in November, is often tested by the broader market's performance in the preceding months.
- If Wynn Resorts wants to beat the June blues and outsmart its unlucky streak, it may need to navigate challenges such as decreased US consumer spending, increased competition in the gaming industry, and changes in regulatory environments.
