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Is Las Vegas Sands a Winning Bet for the Rest of the Year?

With half of 2012 in the record books, it's important to take a look at whether the stocks that interest you can live up to their full potential. By making sure you know about a company's future plans and possible challenges, 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  ) . As we saw in our look at Las Vegas Sands last month, the casino operator has been a pioneer in opening new markets in Asia, but the threat of a slowdown there has made some investors step away from the stock. Are they being shortsighted and missing out on the longer-term opportunity? Let's take a quick look at Las Vegas Sands' prospects for the rest of the year and beyond.

Stats on Las Vegas Sands

Average Stock Price Target $58.63
2012 EPS Estimate $2.67
2013 EPS Estimate $3.08
Fiscal 2012 Sales Growth Estimate 24.8%
Fiscal 2013 Sales Growth Estimate 13.4%
CAPS Rating (out of 5) ***

Source: Yahoo Finance.

Will you win with Las Vegas Sands?
It's certainly reasonable for investors to think that a slowdown in the Chinese economy could have an impact on the gaming industry there. With Las Vegas Sands, Melco Crown Entertainment (Nasdaq: MPEL  ) , and Wynn Resorts (Nasdaq: WYNN  ) having increasingly relied on Asia for their primary growth, anything that affects operations there poses a threat.

But much of the concern about an Asian slowdown seems overdone, at least as it applies to Sands. In the conference call following Wynn's second-quarter report, CEO Steve Wynn said that the Macau market has gotten more competitive, but noted that the new hotels in the area came from Las Vegas Sands. That should give Sands a bigger share of Macau revenue, and even if that revenue doesn't grow as quickly as it did in the past, Sands should still benefit for years to come.

Moreover, geographical diversification gives Sands an advantage over its peers. Just as MGM Resorts (NYSE: MGM  ) has been hamstrung by domestic exposure that left it vulnerable to the plunge in Vegas-based business, Sands doesn't want to bet everything on Macau's sustainability. Between its existing Singapore property, the proposed EuroVegas project, and possibilities for expansion in Japan, Korea, Vietnam, and Taiwan, the casino operator is taking steps to protect itself against anything but a worldwide recession.

All in all, there's plenty of reason to think that the retreat in Las Vegas Sands' stock price is just a temporary blip. It may not be a sure thing, but the odds definitely seem to be in favor of Sands being a winning bet for the rest of 2012 and beyond.

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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. You can follow him on Twitter @DanCaplinger. 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 (2) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On July 19, 2012, at 11:03 AM, JF125780 wrote:

    Thanks Dan for a deserved plug for LVS.

    I bought LVS in November of 2004 when they Sheldon brought them public at $45.00 a share.

    I can't believe they are still below their inception price when they were only dreaming of what they are today.

    Both LVS and Wynn are undervalued today, and yes they are great buys.

    Danny Kowkabany

  • Report this Comment On July 19, 2012, at 9:12 PM, cp757 wrote:

    If an investor want's a double on a stock in the next 6 months this is it. The stock sold off because people thought China was slowing down. Macau will still do 40 billion this year. Macau is spending 100′s of billion’s on all the projects they have to support gambling in Macau because they want 100 billion in revenue in Macau and I think LVS will get 40% of that.

    Do you think China would spend 10.7 billion on a bridge to go from Hong Kong to Macau if they thought they would not have a return on investment. Think about this China will get 40 billion of legal gambling in Macau in 2012 but they have 600 billion in illegal gambling in Mainland China.

    With regard to Jacobs. Adelson takes the advice of his people when he feels it is right. The men that said they got Adelson the license in Macau just got paid off and he was against it but his people said they thought it was best and Adelson said go ahead. If you think Mr Adelson is afraid of what Jacobs would say about a policy on prostitution in Macau just think of what Miriam his wife would say if he had that policy. LOL Adelson said:

    There’s a clinic known as the Adelson Clinic that treats prostitutes and drug addicts. We take prostitutes off the street. We have one clinic that we started almost 21 years ago in Tel Aviv and we have about are 350 patients there. We have another Clinic in Las Vegas with almost 200 patients. My wife is there today signing up another 100 people… And even in Macao we set up a clinic to treat prostitutes and drug addict. It’s not called the Adelson Clinic but we taught the health department to do this.”

    The thing he said about Jacobs that I liked the most was :

    “When the time comes I’ll extract what’s due.”

    Singapore and Macau are very happy with Adelson and other world leaders see that and want him to use his template for the Marina Bay Sands in their county’s. They don’t want to hear about a Disney World, New Zoo or even a regular resort. This is a world trend and is not connected to a TV show like Disney was in the 60′s. This is connected to 11 million millionaires in the world that are now going on vacation 2 to 3 to 4 times a year.

    You can watch as the stock goes up but you now how you will feel in two weeks. I could have bought when it sold in the low 40's.

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10/24/2016 4:02 PM
LVS $57.95 Up +0.79 +1.38%
Las Vegas Sands CAPS Rating: ****
MGM $26.28 Up +0.18 +0.69%
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MPEL $16.70 Up +0.33 +2.02%
Melco Crown Entert… CAPS Rating: ****
WYNN $96.80 Up +1.53 +1.61%
Wynn Resorts CAPS Rating: ****