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 (MPEL +1.58%). 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 |
49.6% |
|
Market Cap |
$8.12 billion |
|
Revenue, Past 12 Months |
$3.98 billion |
|
Net Income, Past 12 Months |
$416.8 million |
|
1-Year Revenue Growth |
10.8% |
|
1-Year Net Income Growth |
104.9% |
|
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' (WYNN +1.05%) Wynn Macau saw a 7% decline in rolling-chip volume during the second quarter versus the previous year, and two Las Vegas Sands (LVS +0.82%) 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 (MGM 0.53%) or Caesars Entertainment (CZR +0.00%). 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.
Click here to add Melco Crown to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.
