Following the events that unfolded in China over the weekend the shares of Crown Resorts Ltd (ASX: CWN) have been crushed. In the last five trading sessions the casino operator's share price has dropped a whopping 18%.
But it wasn't only Crown Resorts that saw its share price drop. Rival casino and resort operator Star Entertainment Group Ltd (ASX: SGR) has also been dragged down on the news.
Its shares are down 13% this week and one fund manager thinks that investors should see this as a buying opportunity.
Earlier this week Charlie Aitken of Aitken Investment Management told Switzer that he's been buying Star Entertainment shares on this weakness as he felt the sell-off was "ludicrous".
With only 10% of the company's revenue derived from Chinese VIPs, he feels there's no reason for the market to be concerned over recent events.
So should you invest in Star Entertainment shares today? At just under 16x estimated FY 2017 earnings its shares do look to be reasonably cheap.
Especially considering the tourism boom that Australia is experiencing. Inbound tourism is predicted to rise at a strong rate for the next decade according to Tourism Australia.
I expect this should lead to strong demand for its Jupiters and Star hotels located in key tourist hotspots such as Sydney, the Gold Coast, and Brisbane. Additionally, just last week the company was granted a casino license for a resort at the Queen's Wharf in Brisbane.
All in all I would agree with Aitken that Star Entertainment is a buy. As events in China unfold there's a chance that its shares could drop further still. But ultimately if you can take a bit of volatility, I feel investing now could prove to be a great move.
