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Wynn CEO Buys 1 Million Shares; Is Current Valuation Indicative Of 'Unearthed Value'?

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Wynn CEO Buys 1 Million Shares; Is Current Valuation Indicative Of 'Unearthed Value'?

  • Shares of Wynn Resorts, Limited (NASDAQ: WYNN) have declined 58.46 percent year-to-date, from $148.76 on December 31, 2014.
  • Deutsche Bank’s Carlo Santarelli has maintained a Buy rating on the company, with a price target of $82.
  • The company announced after market close on December 8 that its Chairman and CEO Steve Wynn has bought one million shares over the past three trading days.
  • Analyst Carlo Santarelli mentioned, “Mr. Wynn acquired ~$63.8 multi-million worth of stock at an average price of ~$63.60 per share. With these purchases, Mr. Wynn now owns 11.07 multi-million shares or ~11 percent of the shares outstanding.”

    Related Link: Susquehanna Sees Significant Value Amid Hotel M&A

    'First Meaningful Insider Purchase' In A Long Time

    Santarelli said that this was the “first meaningful insider purchase” and the first significant open market acquisition by Mr. Wynn in a long time. Santarelli believes that whenever a CEO acquires a significant stake, it sends a positive message.

    According to the Deutsche Bank report, “While Mr. Wynn's purchase will likely be a much needed spark for shares, at least in the short term, we believe it is prudent to be realistic about what the purchase really implies.”

    It is possible that Wynn might simply have perceived the current valuation as being inexpensive and indicative of “unearthed value.”

    There does not appear to be any more reason for the stake purchase, given that Macau visibility continues to be low while the market continues to be challenged.

    Santarelli believes that “this deal shows a confidence that the Wynn Palace development could be a premium share taker.”

    Image Credit: Public Domain

    Latest Ratings for WYNN

    DateFirmActionFromTo
    Feb 2020Morgan StanleyMaintainsEqual-Weight
    Feb 2020B of A SecuritiesUpgradesNeutralBuy
    Jan 2020B of A SecuritiesDowngradesBuyNeutral

    View More Analyst Ratings for WYNN
    View the Latest Analyst Ratings

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