Tag Archives: Melco Crown

Business, Finance, Occupation & Industry

Melco Crown Is Priced for Perfection

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By Travis Hoium, The Motley Fool

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Melco Crown has two exciting resorts under construction, but investors have bid up shares to the point where the company needs to execute flawlessly. But there are a lot of questions that need to be answered before it can live up to expectations. Analyst Travis Hoium explains what exactly needs to go right, and if Melco Crown is a buy right now. 

The Motley Fool answers even more questions about Melco Crown in our most in-depth research available for smart investors like you. Thousands have already claimed their own premium ticker coverage, and you can gain instant access to your own by clicking here now.

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Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

The Philippines Jump Into Gaming

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By Travis Hoium, The Motley Fool

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The first of four major resorts has opened in The Philippines, and it’ll be an important indicator of how gaming can grow outside of Singapore and Macau. Japan, Korea, China, and others are looking at expanding gaming, and this will be a look at whether they’ll dilute other gaming markets. 

Alison Southwick sat down with analyst Travis Hoium to see how Melco Crown will be affected (as its resort is built in The Philippines) as well as the impact on Asian rivals. 

Melco Crown is often a forgotten company in gaming, but it has tremendous upside from Studio City and its partnership in the Philippines, which could more than double the company’s revenue base. This being a more speculative investment, is it worth the risk for smaller investors? The Motley Fool answers this question and more in our most in-depth Melco Crown research available for smart investors like you. Thousands have already claimed their own premium ticker coverage, and you can gain instant access to your own by clicking here now.

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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

Business, Finance, Occupation & Industry

MGM Resorts Needs to Catch a Break

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By Travis Hoium, The Motley Fool

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MGM Resorts can’t seem to catch a break. Macau is growing, but MGM‘s resort is on the wrong side of town. New Jersey is going to allow online gaming, which will be great for operators there, but MGM was kicked out of New Jersey because of its ties to Pansy Ho in Macau. Finally, just as Las Vegas starts to slowly return to revenue and profit growth, Genting Group decides to build another massive resort and suck the air out of MGM‘s sails.

Las Vegas isn’t what it used to be
In 2007, Las Vegas Strip gaming revenue peaked at $6.83 billion and MGM looked like one of the big winners in the industry. Last year, the region gained 2.3% from a year before to reach $6.21 billion in gaming revenue, still well below the peak. The problem is exacerbated by the fact that CityCenter opened in 2009 and The Cosmopolitan opened in 2010, spreading both gaming and room revenue among even wider supply. The competition has shown on the income statement as recently as the last quarter.

Fourth-quarter revenue fell $2.3 million to $2.3 billion, and wholly owned domestic resorts saw a $10.0 million drop in revenue. The only good news is that the company was able to squeeze an extra $15.2 million in EBITDA from wholly owned domestic resorts during the year.

Las Vegas isn’t growing quickly, and MGM and Caesars Entertainment are struggling under heavy debt loads built during the financial crisis. They would be seeing a light at the end of the tunnel because of increased traffic and gaming if it weren’t for the recently announced sale of an 87-acre strip of land to Genting Group by Boyd Gaming . Genting is planning to build a $2 billion-plus resort on the north side of The Strip, with another 5,000 rooms and 140,000 more square feet of gaming. This will grab a lot of the upside in Las Vegas from MGM and Caesars, just as they’re starting to get back on their feet.

Lagging behind in Macau
MGM is definitely happy about its investment in Macau, but the Macau Peninsula isn’t growing as quickly as its neighbors to the south on Cotai. MGM‘s Macau revenue grew just 2% to $731 million from a year ago, which actually outperformed Wynn Resorts , its Macau Peninsula neighbor. Operating income was up 8% to $83 million in the quarter.

The big prize for MGM is its Cotai property, which will hopefully open in the middle of 2016. The company recently broke ground on the resort with 1,600 hotel rooms, 2,500 slot machines, and 500 table games next to Melco Crown‘s City of Dreams and Las Vegas Sands‘ Sands Cotai Central. Both companies have been big winners in Macau recently as Cotai has grown and mass-market play has trended toward Cotai, so the resort should be a big hit for MGM. …read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Can Melco Crown Continue to Shine?

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By Travis Hoium, The Motley Fool

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Melco Crown has been one of the best performing stocks on the market over the past three years, easily surpassing rivals on a total return basis. Even Las Vegas Sands and Wynn Resorts , who generate most of their revenue in Asia, haven’t kept up with Melco’s pace.

MPEL Total Return Price data by YCharts.

How does this much smaller rival continue to beat out competitors with much greater resources?

Growth that just won’t stop
The first reason Melco Crown‘s stock continues to outperform is the company’s improving finances. Fourth-quarter revenue grew 9% to $1.1 billion, EBITDA was up 7% to $247.5 million, and net income was $108 million, or $0.20 per share.

But the key for Melco is why revenue and profits continue to grow. For that, we need to look at the company’s improving competitive position.

Location, location, location
The single biggest reason Melco Crown has been able to outperform rivals is the central location of its largest casino. City of Dreams sits in the middle of Cotai and it has been able to leverage three resorts from Las Vegas Sands and one by Galaxy to draw more revenue there.

Look at the image above and then compare revenue, EBITDA, and mass-market growth over the past year on the Macau Peninsula versus Cotai. You can draw a quick conclusion that gaming is trending toward Cotai, particularly in the mass market.

 

Q4 Revenue Growth Y/Y

Q4 EBITDA Growth Y/Y

Mass-Market Table Drop Growth Y/Y

City of Dreams 

11%

17.6%

24.5%

The Venetian 

10.3%

17.6%

10.5%

Wynn Macau 

-9.7%

-9.5%

-1%

Sands Macau

-2%

4.2%

3.1%

Source: Company earnings reports.

Just the location of Melco’s Cotai resort has been a huge advantage for the company and is a main driver of its stock performance. And it doesn’t look like the draw of Cotai will stop any time soon. Las Vegas Sands is working on another resort, Wynn is as well, and MGM Resorts will soon join the fray with a resort next to City of Dreams. If the mass-market continues to grow like it has recently then Melco Crown should see improving results.

Low expectations
To outperform on the stock market you have to do well financially but it doesn’t hurt if the market sets low expectations to begin with. Two and a half years ago, I lamented that Melco Crown was the worst performing gaming company in Macau by reporting mid-teen EBITDA margin when rivals exceeded a 30% margin.

During the second quarter of 2010, City of Dreams reported a 13.9% EBITDA margin. Today, that margin is up to 28.4%, more than doubling over that time. Even if revenue didn’t more than double, EBITDA would have doubled over that time. With growing revenue and expanding margins Melco Crown was able to rapidly grow …read more
Source: FULL ARTICLE at DailyFinance