Why Melco Crown Is Overvalued

Melco Crown (NASDAQ: MPEL  ) has been the hottest gaming stock over the past few years, but its run may be coming to an end. An enterprise to EBITDA valuation of 16.6 makes it one of the most expensive stocks in gaming, and the upside from two new resorts may already be priced in. 

Better values for investors looking for exposure to Macau include Las Vegas Sands (NYSE: LVS  ) , MGM Resorts (NYSE: MGM  ) , and Wynn Resorts (NASDAQ: WYNN  ) , which all have lower multiples than Melco Crown. Erin Miller sat down with Motley Fool analyst Travis Hoium to see why he would be leery of Melco Crown right now. 

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  • Report this Comment On December 03, 2013, at 11:38 AM, 5thStResearch wrote:

    The old peninsula, where Wynn and MGM operate, is quickly fading out, with all of the foot traffic on the Cotai Strip. Even the Sands on the old peninsula (my apartment was next door to it), once a major draw, is now an after thought compared to The Venetian and Cotai Central. City of Dreams and Galaxy are easily the most impressive properties at the moment and will be for the next 2-3 years at the very least. They dominate the premium mass market that is driving growth in the region, MPEL and LVS best positioned to capitalize on this while MGM and WYNN wont be able to for years. And what use is taking MGM's EBITDA into consideration when they pay away all of it in interest expenses?

  • Report this Comment On December 03, 2013, at 8:14 PM, kris7924 wrote:

    Got to love all these "analyst" who have no idea what they are talking about. MPEL is undervalued, and anyone who knows how to analyze a company would know this. Please learn how to analyze a stock before you call yourself an "analyst" and come up with garbage info

  • Report this Comment On December 04, 2013, at 10:02 AM, Sam0005 wrote:

    MPEL selected today for buy on DSS daily stock select, with a target price of 40 USD! what do yall think!

  • Report this Comment On December 04, 2013, at 10:11 AM, Mayssa wrote:

    Im buying MPEL with a target price 40,20 recommended by DSS daily stock select!!

  • Report this Comment On January 17, 2014, at 1:53 PM, 5thStResearch wrote:

    Great call on MPEL, keep up the good work.

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