Why Steve Wynn Must See Wynn Shares As 'Inexpensive And Indicative Of Unearthed Value'

• Shares of Wynn Resorts, Limited 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 has 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 that “Mr. Wynn acquired ~$63.8 mm worth of stock at an average price of ~$63.60 per share. With these purchases, Mr. Wynn now owns 11.07 mm shares or ~11 percent of the shares outstanding.”

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 Mr. 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.”