Crown Resorts Ltd (ASX: CWN) shares led the S&P/ASX 200 Index (ASX: XJO) higher on Wednesday. The Aussie wagering group's shares rocketed 10.93% higher as the benchmark index rose by 1.51%.
It was a similar story for Star Entertainment Group Ltd (ASX: SGR) shares, which leapt 10.16% higher yesterday. So, do these double-digit share price gains mean wagering shares like Crown are back in the buy zone?
Why Crown shares surged higher on Wednesday
The big news of the day was a significant purchase of Crown shares from private equity group, Blackstone.
The wagering group announced that Blackstone has purchased 67,675,000 shares in Crown. That represents a 9.99% stake of Crown's issued capital, purchased from Melco Resorts & Entertainment Limited for $8.15 per share.
Melco is the Macau-based group run by Lawrence Ho, which controversially purchased the stake from James Packer in June 2019.
The Blackstone purchase booked Melco a $330 million loss but provides more certainty for Crown going forward. Investors were bullish on the news with Crown shares rocketing 10.93% higher to $9.54 per share.
There was no similar announcement for Star Entertainment but that didn't seem to matter. Star shares closed 10.16% higher and I think it's a case of positive signalling. If a firm as experienced and successful as Blackstone is willing to buy in, it's a big vote of confidence for the industry.
Is now a good time to buy?
It's easy to look at a 10% share price gain and think you missed the boat. However, it's important to remember that investing is for the long-term.
With coronavirus restrictions starting to be rolled back, it could be a good time to buy Crown shares. I still think it's too early to tell what the long-term impact will be on the wagering industry and Crown's business model.
However, it's historically been a strong ASX dividend share and could well return to those levels in 2021.
