In Barry Levinson’s classic film Rain Man, Dustin Hoffman’s character leans into his brother during a hand of blackjack and gives him simple advice: “Bet two for good, bet one for bad.”
in the case of Wynn Resorts If you own the stock, it might be time to stake two for good.
Steve Wynn hasn’t necessarily been on a winning streak. No longer running the company of the same name, he finally sold his penthouse at 50 South Central Park after putting it on the market for years. WYNN stock isn’t actually on a winning streak either. As I write this, the stock is down more than 27% year-to-date. It has fallen more than 46% from its 2025 high in the past few weeks. But there has been a bit of a recovery since then, and perhaps the tide is turning.
Fundamentally, this business has been exceptionally strong, especially in the United States. Wynn’s Las Vegas EBITDA margin is actually higher than its Macau resort’s EBITDA margin. Recognizing this, management accelerated capital spending in Las Vegas, and the company’s profits have doubled from pre-pandemic levels. Meanwhile, the Asian market is also booming. Strategic real estate upgrades in Macau have been successful in attracting high-value premium mass play, which directly supports the company’s ambitious expansion plans for Wynn Palace’s Enclave.
From a valuation perspective, WYNN is trading very close to its five-year average across key metrics such as P/E, EV/EBITDA (currently around 9x to 10x), and price-to-book ratio. Although this is slightly expensive compared to the overall gaming industry average, Wins justifies the premium. (The Encore, the newer of the two Las Vegas-adjacent hotels, is one of my favorite hotels on the Strip.) Strictly speaking, the stock is trending down, but this recent sharp rebound from its late October lows may signal that the downtrend is over. Several technical indicators, specifically the MACD, Fear & Greed Index, Commodity Channel Index (CCI), and several major moving averages, are currently in line, suggesting it may be time to go long.
Win, YTD
So how should traders play this setup?
The next earnings report isn’t scheduled until February, so the stock has a clear runway without any binary fundamentals, but implied volatility is still surprisingly high. This environment makes buying options expensive and shorting premium strategies more attractive.
Instead of betting on roulette, traders should take another look at the “roulette” strategy. Here’s what we discussed earlier this week about United Rentals. What’s your strategy? Step one is to sell a cash-covered put below the current market price and collect that inflated premium. If WYNN remains above the strike price until expiration, hold on to your cash and repeat the process. If the stock price falls and you are allocated, you will get the stock at a discounted price. Once the assignment is complete, proceed to step 2. Sell covered calls against new stock positions to generate ongoing income until the stock is eventually called out. Then go back to step 1 and play again. A systematic, high-probability way to get world-class operators long while getting rewarded for waiting.
Disclosure: Tidal owns/holds all securities mentioned in the article.
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This content is provided for informational purposes only and does not constitute financial, investment, tax, or legal advice or a recommendation to purchase any security or other financial asset. The content is general in nature and does not reflect your unique personal circumstances. The above may not be appropriate for your particular situation. Before making any financial decisions, you should strongly consider seeking the advice of your own financial or investment advisor.
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