Why Las Vegas Sands Has Been a Push in 2012

As we approach the halfway point for 2012, now's a good time to look back at what's happening with the stocks that interest you. By making sure you know the important things that a company accomplished -- as well as the setbacks it experienced -- you can make a better decision about whether it's a smart investment for your portfolio.

Today, let's take a look at Las Vegas Sands (NYSE: LVS  ) . The company named after the once-capital of the gaming world has been a leader in taking the Vegas model well beyond its home nation's shores and now relies on faraway casino centers such as Macau and Singapore for the bulk of its profits. A hiccup in Asian growth, though, has the gaming industry worried about the future. Let's take a quick look at how the stock is doing so far this year.

Stats on Las Vegas Sands

2012 YTD Return 1.6%
Market Capitalization $32.7 billion
Revenue, Most Recent Quarter $2.76 billion
Year-Over-Year Revenue Growth, Most Recent Quarter 30.8%
Net Income, Most Recent Quarter $499 million
Year-Over-Year Net Income Growth, Most Recent Quarter 72.5%
CAPS Rating (out of 5) ***

Source: S&P Capital IQ, company reports.

What's going on with Las Vegas Sands this year?
Las Vegas Sands has a long history that goes back almost to the founding of the Vegas Strip. But the original Sands Hotel is long gone, and the company has moved on to seek riches around the world. As a pioneer of the gambling center of Macau, Las Vegas Sands paved the way to huge growth that Vegas competitors Wynn Resorts (Nasdaq: WYNN  ) and MGM Resorts (NYSE: MGM  ) have sought to emulate. Then, Las Vegas Sands was fundamental in the development of the Cotai Strip, where Melco Crown Entertainment (Nasdaq: MPEL  ) followed with its City of Dreams project and where Wynn and MGM are still in the process of trying to join them.

Now, Las Vegas Sands is still trying to expand. Its venture in Singapore has gone well, and CEO Sheldon Adelson hopes to create his EuroVegas project in Spain that would help unify European casino patrons. Such a project would cost $35 billion but could go a long way toward diversifying the company's exposure, with the side effect of boosting the ailing Spanish economy in the process.

The problem recently has been the threat of an Asian slowdown. If Chinese growth does in fact slow, it could hit Macau, which has been the growth driver for the company. That's a big part of why shares haven't moved much this year, but if the economy in Asia doesn't turn out as badly as many fear, then it could make Las Vegas Sands a winning bet.

Las Vegas Sands has good odds in the long run, but it's not a sure bet. To get some other promising stock ideas, let me invite you to learn about three smart long-term stock plays in the Fool's latest special report. It's yours for the taking and is absolutely free, but don't miss out -- click here and read it today.

Click here to add Las Vegas Sands to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.

Fool contributor Dan Caplinger doesn't own shares of the companies mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool has a disclosure policy.


Read/Post Comments (3) | Recommend This Article (2)

Comments from our Foolish Readers

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  • Report this Comment On June 27, 2012, at 11:07 AM, cbotrader wrote:

    I have no argument with your piece, but would just like to say that LVS has been a brilliant performer and Sheldon and his associates have proved themselves with winning bets wherever they have expanded into despite the analysists always betting against them.

    There numbers from Macau are stunning but instead of embracing them, here we go again with the same analysts who have never made $100,000 in a single year, spouting out needless dribble such as...."what if China slows down"? and "What if Singapour falls in the ocean"?

    Honestly, anyone can come up with a million negative "what ifs" and if we listen to these people instead of the men and women with a proven track record, we would all have our money in matresses.

    Of course there is risk, but there is the possibility of disaster in every investment. I know where the management team gets its credientials....but perhaps we should look at the track record of the analysts just as closely.

  • Report this Comment On June 27, 2012, at 11:50 AM, MutualFundMonday wrote:

    While the fall in share price can be attributed to the fears of a slowdown in China, I think a lot of it can be attributed to the HK analysts' rumor mongering that China is going to curtail visitation to Macau and credit is decreasing. Public enemy #1 is Cameron McKnight at Wells Fargo who has consistently cried wolf the past 2 years that Macau was facing an immiment slowdown in visitation and credit. Analysts such as these should be the ones answering to congressional hearings for making up baseless rumors to support their trading desk's positions and not people like Dimon at JPM.

  • Report this Comment On June 28, 2012, at 1:37 AM, cp757 wrote:

    LVS stock is down on a rumors that they will not have a good second quarter because of a China slowdown and the facts will prove they are wrong. The fact is the first 17 days of June in Macau are up over 18% and that will drive the stock price higher. Las Vegas Sands market share will be 20% on increased revenue. This is not the first time they dropped the stock 20% on rumors. I have not read any critics articles that had any facts , just regurgitated media noise and that's not the way to invest. Most people that do well at investing hear people that regurgitate media noise and walk the other way. Why bother to point out facts when they are having so much fun regurgitating media noise. Sheldon Adelson has found the best minds in the business and when he got the wrong ones he fired them. Again just the facts. Try to think of investing without the noise you hear from the media. The stock goes up because everyone knows Adelson is bringing in more revenue than any other company. The analysts that write about LVS study everything about the company and they have 22 strong buy or buy ratings on the stock. The stock goes down on rumors that are unfounded. No facts to back them up. LVS will do over 1 billion in EBITDA in the second quarter on increased revenue in Macau, Singapore , Vegas, and Pennsylvania. Watch LVS stock price ,"Fly in July"

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