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A full forensic report will be available to professional subscribers next week. Here is the latest retail/preview summary: pdf  Updated Wynn Research Note 2009-02-15 09:36:21 266.62 Kb

Successful short seller has eyes for Wynn


A researcher and investor who foresaw the banking crisis, the residential and commercial real estate crashes and the downfall of General Growth Properties has set his sights on stock in Wynn Resorts Ltd. as a short-sell candidate.

Reggie Middleton, a Brooklyn-based investor who was months ahead of most analysts on numerous market-related events in the past two years, says in a nine-page report that Wynn Resorts stock is overvalued by about 26 to 65 percent.

Middleton decided to research Wynn because he spotted issues typical of companies heading for rough times.

"I look at companies with debt coming up or declining profits," Middleton said. "Wynn came up a winner, or a loser."

The report, published as proprietary research to subscribers to Middleton's BoomBustBlog Web site, cites $1 billion in debt coming due in June 2010.

It also notes falling room rates have increased the company's dependence on casino revenue, a notoriously volatile source even in good times.

It was published Sunday and was written when Wynn stock was trading at about $26 per share. The 52-week high was $119. It closed Thursday at $23. Stock in most major gambling companies has taken a beating in the past year.