Melco Crown in 2012: A Big Winner

2012 is nearing its end, and now's a good opportunity to look at what happened throughout the year to the stocks you follow. If you know the important things that a company achieved, as well as any challenges it failed to overcome, then you can make a better decision about whether it really deserves a spot in your portfolio.

Today, I'll look at Melco Crown Entertainment (NASDAQ: MPEL  ) . Despite its relatively small size, Melco Crown has the distinction of being a pure play on the success of the Asian gaming capital of Macau. But as Asian economies have started to see their growth slow, Macau has started to see the effects. Below, you'll find more on what moved shares of Melco Crown this year.

Stats on Melco Crown

Year-to-Date Stock Return


Market Cap

$8.12 billion

Revenue, Past 12 Months

$3.98 billion

Net Income, Past 12 Months

$416.8 million

1-Year Revenue Growth


1-Year Net Income Growth


CAPS Rating (out of 5)


Source: S&P Capital IQ.

What sent Melco Crown soaring this year?
Coming into 2012, everything seemed to be going well for Melco Crown. Strong growth and the prospect for further success on the Cotai Strip had investors optimistic about Macau in general.

Yet by summer, it was apparent that growth in Macau was taking a pause. Wynn Resorts' (NASDAQ: WYNN  ) Wynn Macau saw a 7% decline in rolling-chip volume during the second quarter versus the previous year, and two Las Vegas Sands (NYSE: LVS  ) properties experienced declines of 16.5% and 20.5%, respectively. Fortunately for Melco, it was able to hold its losses to just 1% at its City of Dreams resort.

Still, one big way in which Melco stands out from its U.S.-based counterparts is in its relative lack of debt. With less than a year's worth of operating earnings in net debt, Melco has a lot more flexibility to make ambitious moves than debt-ridden MGM Resorts (NYSE: MGM  ) or Caesars Entertainment (NASDAQ: CZR  ) . It also trades at a better valuation than its peers, which explains why its stock has had more room to rise.

Of course, if Asia continues to falter, Melco Crown can't avoid feeling the hit forever. For now, though, the company has done an excellent job of weathering what could be a big storm for Asian gaming. 

Learn more
Melco Crown may have done well in 2012, but how's 2013 shaping up for the oft-forgotten gaming company? 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: Just click here now.

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Read/Post Comments (2) | Recommend This Article (0)

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  • Report this Comment On December 07, 2012, at 6:59 PM, cp757 wrote:

    Its all about growth and Las Vegas Sands has the growth. The 3Q results for LVS. Macao – Record EBITDA driven by strong growth in all segments

    Rolling volume increased 45.5% to record $36.04 billion

    Mass table win increased 36.4% to record $658.4 million

    Slot and ETG win increased 29.4% to record $127.7 million

    Mass tables

    Mass table win up 36.4% to record $658.4 million

    Mass table efficiency up 26.1% to $8,699 win per table per day they will add 200 tables in January.

    Slots and ETGs

    Slot and ETG win up 29.4% to record $127.7 million driven by 105.6% increase in ETG win to $35.2 million

    VIP gaming

    Rolling volume up 45.5% to record $36.04 billion

    VIP table efficiency up 6.8% to $780,000 roll per table per day

    Integrated resort of ~13.7 million SF (upon completion of all phases), which cements our unrivaled scale on the Cotai Strip

    Phase I opened on April 11, 2012 and features:

    Mass gaming floor with ~170 gaming tables and ~950 slot machines, including ~250 ETG seats

    Paiza Club VIP gaming area with ~150 tables

    636 Conrad-branded hotel rooms and 1,224 Holiday Inn-branded hotel rooms

    Portion of over 1.2 million SF of retail, entertainment, dining facilities and MICE space

    Phase IIA opened on September 20, 2012 and features:

    Additional mass gaming floor with ~150 gaming tables and ~1,400 slots and ETGs

    ~1,800 Sheraton-branded hotel rooms

    Additional retail and dining amenities

    Walkover Bridge to be completed in 1Q13

    Phase IIB will open in 1Q13 and feature ~2,100 Sheraton-branded hotel rooms

    Phase III is expected to include a fourth luxury St. Regis-branded hotel and mixed-use tower

  • Report this Comment On December 09, 2012, at 6:23 PM, veryst wrote:

    Why the revenue growth just only 10,8% ??

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