Tag Archives: Melco Crown Entertainment

Business, Finance, Occupation & Industry

Is Las Vegas Sands a Cash King?

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By Jim Royal, The Motley Fool

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As an investor, it pays to follow the cash. If you figure out how a company moves its money, you might eventually find some of that cash flowing into your pockets.

In this series, we’ll highlight four companies in an industry and compare their “cash king margins” over time, trying to determine which has the greatest likelihood of putting cash back in your pocket. After all, a company can pay dividends and buy back stock only after it’s actually received cash — not just when it books those accounting figments known as “profits.”

Today, let’s look at Las Vegas Sands and three of its peers.

The cash king margin
Looking at a company’s cash flow statement can help you determine whether its free cash flow actually backs up its reported profit. Companies that can create 10% or more free cash flow from their revenue can be powerful compounding machines for your portfolio. A sustained high cash king margin can be a good predictor of long-term stock returns.

To find the cash king margin, divide the free cash flow from the cash flow statement by sales:

Cash king margin = Free cash flow / sales

Let’s take McDonald’s as an example. In the four quarters ending in December, the restaurateur generated $6.97 billion in operating cash flow. It invested about $3.05 billion in property, plant, and equipment. To calculate free cash flow, subtract McDonald’s investment from its operating cash flow. That leaves us with $3.92 billion in free cash flow, which the company can save for future expenditures or distribute to shareholders.

Taking McDonald’s sales of $25.5 billion over the same period, we can figure that the company has a cash king margin of about 14% — a nice high number. In other words, for every dollar of sales, McDonald’s produces $0.14 in free cash.

Ideally, we’d like to see the cash king margin top 10%. The best blue chips can notch numbers greater than 20%, making them true cash dynamos. But some businesses, including many types of retailing, just can’t sustain such margins.

We’re also looking for companies that can consistently increase their margins over time, which indicates that their competitive position is improving. Erratic swings in margins could signal a deteriorating business, or perhaps some financial skullduggery; you’ll have to dig deeper to discover the reason.

Four companies
Here are the cash king margins for four industry peers over a few periods.

Company

Cash King Margin (TTM)

1 Year Ago

3 Years Ago

5 Years Ago

Las Vegas Sands

14.5%

12.3%

(31.9%)

(116.3%)

MGM Resorts

5.5%

5%

7.6%

(25%)

Melco Crown Entertainment

17.9%

17%

(78.9%)

(146.8%)

Wynn Resorts

From: http://www.dailyfinance.com/2013/04/12/is-las-vegas-sands-a-cash-king/
Business, Finance, Occupation & Industry

These Gambling Stocks Can Pay Off

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By Selena Maranjian, The Motley Fool

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Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you’d like to add some gambling-oriented stocks to your portfolio, the Market Vectors Gaming ETF could save you a lot of trouble. Instead of trying to figure out which companies will perform best, you can use this ETF to invest in lots of them simultaneously.

The basics
ETFs often sport lower expense ratios than their mutual fund cousins. The Market Vectors ETF‘s expense ratio — its annual fee — is a relatively low 0.65%. The fund is very small, too, so if you’re thinking of buying, beware of possibly large spreads between its bid and ask prices. Consider using a limit order if you want to buy in.

This ETF has performed reasonably, beating the world market over the past three and five years. As with most investments, of course, we can’t expect outstanding performances in every quarter or year. Investors with conviction need to wait for their holdings to deliver.

Why gambling?
No matter whether you approve or don’t, casinos and gambling seem to be here to stay, and the games they offer are designed to make gamblers lose, overall, while the house wins. Not all casino companies are the same, though, so you should choose carefully, or invest in a big bunch via a fund such as this one. Note, though, that the traditional gambling industry is being threatened by the rise of online gambling.

More than a handful of gambling-focused companies had strong performances over the past year. Melco Crown Entertainment surged 62%, and is near its 52-week high. Thus, with a forward P/E now above 21, it’s priced for perfection. Its City of Dreams casino on Cotai has been performing well in a great location, and its projects under way include one in the Philippines.

Las Vegas Sands gained 2%, and recently yielded 2.5%. It’s also looking richly valued. The company seems to have violated some international corruption laws, though that might not be that big a problem. It’s profitable, and its free cash flow has been growing in recent years. With properties in Las Vegas not performing as well as in the past, this company and many of its peers are looking to Asia for their future growth.

Other companies didn’t do as well last year, but could see their fortunes change in the coming years. MGM Resorts shed 10%, facing some tough headwinds that include a massive and growing debt burden. It’s pinning a lot of hope on a Cotai casino under construction, but that isn’t scheduled to open until 2016.

Another good way to profit off of gambling’s growth is to invest in the companies that equip the casinos, such as International Game Technology . Down about 1% over the past year, it recently upped its dividend by 14%, and yields about 1.9%. Better …read more

Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Here's What This Annual 20% Gainer Has Been Buying

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By Selena Maranjian, The Motley Fool

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Every quarter, many money managers have to disclose what they’ve bought and sold, via “13F” filings. Their latest moves can shine a bright light on smart stock picks.

Today, let’s look at Caxton Associates, founded in 1983 by Bruce Kovner. The investment company is known for relatively few years of negative returns and for average annual gains of about 20% since its inception nearly 30 years ago (per a Wall Street Journal article). That’s a powerful record.

Caxton is also known for charging clients dearly for the privilege of going along for the ride. In an industry known for routinely charging 2% of assets annually while also taking 20% of profits, Caxton had long charged 3% and 30%, though that was shaved down to 2.6% and 27.5% last year — still very steep. (It’s not the only one with such above-average fees.)

The company’s reportable stock portfolio totaled $2.4 billion in value as of Dec. 31, 2012.

Interesting developments
So what does Caxton Associates‘ latest quarterly 13F filing tell us? Here are a few interesting details:

The biggest new holdings are Williams and puts on the iShares Russell 2000 ETF , which focuses on small-cap companies. Other new holdings of interest include R.R. Donnelley & Sons and Northstar Realty Finance . Commercial printer Donnelley provides labels, packaging, and more to the private and public sector. It prints many thousands of forms for the SEC and bought Edgar Online. Bears worry about its steep debt load and a possible reduction of its massive dividend, which recently yielded 9.4%. To succeed, the company needs to do more digital business.

NorthStar Realty Finance is another strong dividend payer, recently yielding 7.5%. It has been growing its revenue at a double-digit clip over the past few years, and offers the benefit of being diversified between real estate debt, mortgage-backed securities, and the old-fashioned leasing of owned properties. While many mortgage-related real estate investment trusts (REITs) have been cutting their dividends, NorthStar recently upped its payout.

Among holdings in which Caxton increased its stake was Melco Crown Entertainment , which operates casinos in gaming Mecca Macau. The company has been performing well lately, racking up revenue and earnings gains and more than doubling its EBITDA margin over the past few years. It’s expanding with properties in the Philippines and elsewhere, too. (The Philippines is expected by some analysts to become a $3 billion gambling market by 2015.)

Caxton reduced its stake in lots of companies, including Regions Financial . The bank is attractive on many counts. It’s repaid its TARP obligation, is posting improving net interest margin and asset quality, and has a powerful presence in the growing Southeast region. Its recent quarter featured a swing from a big loss to a big gain, among other achievements, and a recent stress test revealed improvement in its financial condition, with dividend hikes on the way.

Finally, Caxton Associates‘ …read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Here's What This Top-Earning Billionaire Has Been Buying

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By Selena Maranjian, The Motley Fool

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Every quarter, many money managers have to disclose what they’ve bought and sold, via “13F” filings. Their latest moves can shine a bright light on smart stock picks.

Today let’s look at Moore Capital Management, managed by billionaire Louis Moore Bacon, who’s known for employing a global macroeconomic focus in his investing. He’s been among the top 20 money earners since the 1990s, per GuruFocus.com.

The company’s reportable stock portfolio totaled $3.9 billion in value as of Dec. 31.

Interesting developments
So what does Moore’s latest quarterly 13F filing tell us? Here are a few interesting details,

The biggest new holdings are calls on two ETFs — PowerShares QQQ and Market Vectors Gold Miners. Other new holdings of interest include Sarepta Therapeutics and RF Micro Devices . Sarepta Therapeutics has a lot of people excited about its innovative and promising Duchenne muscular dystrophy drug eteplirsen, which may end up winning accelerated FDA approval. Some wonder whether the company will get bought out, while Wall Street’s interest in the company is growing. Its recent reported loss isn’t as alarming as it seems, either. The company is spending money on boosting its production capacity, too.

RF Micro Devices specializes in radio-frequency (RF) components and semiconductors and has been faring well, as a result of being a component supplier for iDevices. It also supports lower-end phones. Bulls are hopeful about it doing a lot of business in China, where smartphones and upgrades of phones are strong sellers. Some analysts are also expecting a rebound in global semiconductor demand, which bodes well for the company, and smartphones are increasingly employing more RF technology.

Among holdings in which Moore Capital increased its stake was American Capital Agency , which offers investors a huge dividend yield topping 15%. Some worry that the dividend may get reduced (as has happened with some mortgage REITs), but its CEO is bullish enough to have bought more than $500,000 worth of shares recently. In the meantime, the company recently benefited from an increased interest-rate spread higher than some high-profile peers. It has also boosted the proportion of its portfolio that isn’t likely to suffer from borrowers who refinance and prepay mortgages. Be wary, though, as there are some aspects of the company that aren’t too appealing, and it’s quite sensitive to changes in interest rates and inflation. My colleagues have questioned some of management’s moves, too.

Moore Capital reduced its stake in lots of companies, including Melco Crown Entertainment . Melco Crown operates casinos in gaming Mecca Macau, and it has been performing well lately, racking up revenue and earnings gains, and more than doubling its EBITDA margin over the past few years. It’s expanding with properties in the Philippines and elsewhere, too.

Finally, Moore’s biggest closed positions included US Bancorp and the iShares iBoxx High Yield Corporate Bond ETF. Other closed positions of interest include TECO Energy . Holding …read more
Source: FULL ARTICLE at DailyFinance

News, Politics, Government

Macau Casinos Going Strong Despite Chinese Slowdown

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By Zacks.com, Contributor The gaming industry in Macau is hot, which is great news for Melco Crown Entertainment Limited (MPEL – Snapshot Report). This developer and owner of casino gaming and entertainment resorts hit a 52-week high on Jan 15, shortly after a report that Macau’s gaming revenue grew 13.5% in 2012. Melco Crown Entertainment primarily operates in this region.
Source: FULL ARTICLE at Forbes Latest