With so many investors worried about slowing growth in China, shares of Las Vegas Sands (NYSE: LVS ) have trended lower recently, but at the core, Las Vegas and other major operators still have a huge amount of growth ahead of them. While Macau has seen slowing a bit, by just about any measure the region is still far outpacing growth in broader China, and Las Vegas Sands' growth is faster than even Macau's. The company still has a lot of room to build out its newest property, the Sands Cotai Central, as well.
Sheldon Adelson has even announced that he'd like to deploy Las Vegas Sands' excess capital in the form of dividends or share repurchases. I like either strategy, and think this company is now too cheap, and has too much growth left to ignore.
Las Vegas Sands and other operators have unlocked huge value by looking internationally, but there are actually a handful of companies that do it better. To read more about them, i invite you to read our premium free report 3 American Companies Set to Dominate the World. Click here to get your free copy before it’s gone.
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Report this Comment On August 03, 2012, at 5:12 PM, thedudeman123 wrote:
LOL, is your entire staff over at the fool heavilly invested in LVS? Man, all you guys do is pump and pump this stock week after week.
Supply has outpaced demand. Deal with it. Get over it. Move on.
Macau stocks were fun for a few years, but all good things come to an an end eventually.
Your views on China are very similar to expert opinion on the US housing market. China is not immune. China peaked and Macau is suffering. The casinos will be fighting for market share and that cost $$$$ lots of it.
Report this Comment On August 03, 2012, at 5:42 PM, spokanimal wrote:
Pretty decent synopsis for such a young fellow.
Still, no mention of Sand's 22% macau market share for july... a multi-year high.
S
Report this Comment On August 03, 2012, at 6:14 PM, cp757 wrote:
Austin Smith this is a great report but lets get your figures into play. On 06/29/2012 you said Las Vegas Sands was a buy at 43.64 and I agree but the question is what do you think it will get to this year. I won't put words in Travis Hoium mouth because he likes the movie The Italian Job that stars Mark Wahlberg and my favorite movie's are the Oceans series. I like the origanal Oceans Eleven the most because that had Frank Sinatra, Dean Martin, Sammy Davis, Jr., Peter Lawford, and Joey Bishop. I know its the old Vegas but they where so cool.
Well back to what I was saying. Travis Hoium on 06/08/2012 said the stock was a buy at 45.13 and I agree with what he is saying but what does he think it will get to this year. In January of 2012 I said I thought it would go to 75 dollars a share this year because of increased revenue from Cotai Central and you have pointed out that Macau is doing great. I know what changed for the price of Las Vegas Sands stock was the worry over China falling. I said it wont happen, and you say so far it is not happening, so I guess my thesis is still in play. They say when there is blood on the street that is when to take advantage of the market and I think this fall was as ugly as that.
The thesis of increasing market share from the ramp up of Cotai Central is on pace. Macau casinos took in US$3.1 billion in July. Macau is on Pace for 37.3 billion dollars as of July 2012 up from 33.5 billion in 2011, Macau could do 38 to 39 billion in 2012. Las Vegas Sands garnered a bigger share of mass market in Macau for July. During the mid-June to mid-July period, Las Vegas Sands led the market with a weighted share of customers of 38.4 percent. The question is who is giving up Market Share. In the last 90 days the biggest loser of market share was SJM, they have lost market share to Las Vegas Sands and they are down 4%
In the last 90 days Las Vegas Sands has had the highest increase in market share in Macau up 5.5% July market share was ... 22%
The analysts will never say that the drop in the share price was an over reaction but they could put better target prices on them. I could have said the stock will go up from 34.72 but that is not much of a call if we think Macau will do 38 billion dollars in 2012
Foot traffic on Cotai, a Las Vegas Sands propertie recorded a 67 percent share in the period of mid-June to mid-July, up by 3.0 percentage points from the previous period.
“Towards the end of July, they have recorded a 71-percent share of walk-in traffic for Las Vegas Sands properties suggesting the company is increasingly keeping customers within the family of products in the months following the opening of Sands Cotai Central,” analysts Grant Govertsen and Felicity Chiang wrote in an industry research note."
The price of the stock is 38.75 on August 3, 2012 up 1.84 so my question is do you think it can go up another 36.25. I do. I guess we will see.
Report this Comment On August 03, 2012, at 10:19 PM, TMFBWItime wrote:
@cp757
Lots of great info in that comment! If the question is can it go up an other $36.25 ever, my answer is yes. If the question is will it happen in the next twelve months, well that may be a little aggressive, but it won't be for lack of effort on the company's part.
The way I see it the market has pushed shares lower than they deserve, and as long as we see slowing growth in China, which I expect to persist for some time, then the market will likely always place an undue discount on Las Vegas Sands.
Fortunately we may have extra dividends and share repurchases on the horizon. Given that, I'd actually like to see shares remain depressed for a little while and give management time to put their dollar to work in the most meaningful way possible. This is the opposite of what most shareholders would wish for, but we're long-term investors at The Fool and being patient while management gobbles up shares on the cheap is the recipe for long-term wealth building.
At the level you're talking about Las Vegas would be a double in twelve months. Given concerns about China (though Macau remains strong) and a lack of new major properties on the immediate horizon (and the diminishing return of additional properties) I do not think they'll be a double by August 2013.
But with all the cash they're generating and the multiples they're trading at, I do firmly believe they are a consistent long-term market beater.
Fool on,
Austin
Report this Comment On August 04, 2012, at 1:18 AM, cp757 wrote:
Austin I have family that live by you so your comments are interesting from that perspective. I never took vacations for years bwhen I was younger, just like you but in the long run you need to get a different perspective by seeing the world. Catch a good movie like Travis. Reading "The Autobiography of Jenna Jameson" can be relaxing. That was a good use of your spare time.
On another note the real increase in the share price of Las Vegas Sands is from 62.09 to 75 dollars which is 12.91 and that's a 21% increase . The only reason the stock went from 62.09 to 36 was because investors thought China was falling. Nothing has changed and when Las Vegas Sands has 35% market share and the increased revenue shows up for Macau you will write how you had been positive on the stock in August. Its just you will still have a low target on the stock for 2012 and I will still say the 75 dollars is posible this year.
I don't want management to buy back shares I would be just as happy with a stock split but that's not even a big deal. What I want them to use capital for is to grow revenue. If Japan gave permission to build an 8 billion dollar Integrated Resort in Tokyo tomorrow how many operators could do it and what would that do to the price of the stock. The other thing I would point out is Las Vegas Sands was very aggressive on write offs in the second quarter and a lot of companies would have waited until the third quarter to charge those expenses off, so my take is they will have a big surprise in the third quarter and that will move the stock more than people think..
Fool on,
CP
Report this Comment On August 04, 2012, at 10:57 AM, cp757 wrote:
Austin the only reason I brought up your reading "The Autobiography of Jenna Jameson" can be relaxing, was because you put that in your profile. This idea that I need to worry about China having lower growth, and it will effect Macau is absurd. Everyone's thesis on investment's in Macau is based on the revenue is going to continue at a lower rate and in comparison to double digit growth things have changed for the worse. I could go along with that a little, as long as you hold a rising economic tide lifts all boats. I do not hold with that in Macau and the facts support my argument.
In Macau you only have six licence's and SJM was the market share leader but they where in the old Macau. Even though they where the market share leader they did not make as much profit as Las Vegas Sands as a percentage of all the profit made in Macau. The other battle you had was between mass market and VIP. Clearly Las Vegas Sands is taking VIP, mass market and total market share from all the other licence holders.
Mass is a big win for Las Vegas Sands because they have the most tables, the most rooms, and the most slots. WYNN used to be the VIP king but that is gone because the VIP player wants the new rooms on Cotai. Can you blame them. The VIP players don't want to play at the old Macau anymore than a high roller would go to Circus Circus in Vegas. Circus Circus was fine in 1968 but high rollers move on. Cotai Central is the place they want to be. A billionaire can't take a million dollars from someone that doesn't have it.
In July Macau did 3.1 billion dollars and the way everyone is looking at this is with 6 licence's that's 516 million for each casino operator but that is not how it works. SJM is losing market share and Las Vegas Sands is gaining market share and bottom line profit. The recent violence in Macau is over turf and all of Stanley Ho's family are involved. Every old contact is being squeezed just as the mafia riddled Vegas was when Vegas was reborn. They had their day and now it's the new Cotai Central Strip and the way it is laid out the only advantage goes to Las Vegas Sands.
Las Vegas Sands is the only boat that will rise and the others will sink and that is what is happening. The facts for July show the trend I am talking about clearly and yet everyone think's Las Vegas Sands will stay under 50. If everyone wants to worry about China that's fine but Las Vegas Sands will be at 75 dollars this year. I can guarantee you the other stocks in Macau will not double.
Report this Comment On August 04, 2012, at 12:32 PM, 10HighSigns wrote:
THE ONE CASINO that's still a BUY is Melco Crown.....wait until Tuesday morning and observe
they didn't suffer like the others. Actually, LVS
brought more customers to the Cotai Strip and
MPEL benefits from the Sands promotions!
Report this Comment On August 04, 2012, at 1:36 PM, cp757 wrote:
10 High Signs I understand your position and I agree MPEL will benefit a little from its location but the facts show its less than 1%.
MPEL owns and operates City of Dreams, with 1,400 rooms and 400 gaming tables and 1,300 gaming machine's,. It is run by the son of Stanley Ho, Mr Yau Lung Ho. They are close to the Cotai Strip owned by Las Vegas Sands.
LVS is Cotai Central. China has given every advantage to Sheldon Adelson in Macau with Las Vegas Sands. They gave him 40% of the rooms in all of Macau. They gave him 31% of all the slots with over 6000 machines. They gave him 1535 gaming tables, 27% of all the tables in Macau. They will open 16,000 more rooms over the next 48 months to keep up with demand.
They will add “4,000″ rooms on lot 3 and that will be open in 2015 or 2016.
Phase IIA will open September 20, 2012 and will feature an additional mass gaming floor with 200 gaming tables and 1,300 slot machines and “2,500″ Sheraton‐branded hotel rooms
Phase IIB will open progressively beginning in October
2012 and will feature “1,500″ Sheraton Towers‐branded hotel rooms
They will add over 10,000 hotel rooms to be developed on Hengqin Island, Adjacent to Macao China is expected to overtake Germany and the U.S. as the largest outbound tourism market in the world in 2012 or 2013
With 24,000 rooms owned by Las Vegas Sands in the next 5 years MPEL will hardly make a dent with 400 gaming tables.
In the last 90 days Las Vegas Sands has had the highest increase in market share in Macau up 5.5% July market share was ... 22%
In the last 90 days MPEL is the only other casino in Macau with an increase up 0.9% July market share was...........13%
All other casino operators lost maket share and MPEL was less that 1% to Las Vegas Sands 5.5% gain.
Report this Comment On August 04, 2012, at 8:40 PM, bornlazy wrote:
CP
By your own account, MPEL has 1400 rooms and 400 tables. It is only one tenth of Sands China's size. If Sands China gains 5.5%, MPEL should gain just .5% to be even with Sands China. Yet, MPEL gained a lot more than that. Looks like the gains are mostly from mass market. I think MPEL may be even better than LVS.
Report this Comment On August 04, 2012, at 11:30 PM, cp757 wrote:
born lazy LOL your math is truly amazing,
Report this Comment On August 04, 2012, at 11:35 PM, danconfund wrote:
Chinese economy is slowing down rapidly.
American economy is sluggish, in addition European travelers to both macau and lv don't have disposable income.
Add in lawsuits and criminal negligance.
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