The last three quarters of 2014 were tough on casino companies and their investors. The drop in gaming revenue in Macau starting in the second quarter of last year has led to declines in share price for gaming giants Las Vegas Sands (LVS 2.42%), Wynn Resorts (WYNN 2.62%), and MGM Resorts International (MGM 0.02%). 

While some companies were hit harder than others (Wynn Resorts' stock, for example, is down about 50% in the last 12 months), each company has taken a hit. This means the industry as a whole is much cheaper than it was a year ago and could hold value for the long term -- if you bet on the right company. Here's why I own share of Las Vegas Sands, and why I wouldn't buy Wynn or MGM. 

Out in front of the most important trends
Macau has recently become a major drag on the casino industry, thanks to the Chinese government's campaign against corruption of high-net-worth individuals. Because of that campaign, the entire VIP segment that historically made up a large chunk of gaming revenue in the Chinese special administrative region has been in decline.

However, the mass market in Macau, fueled by China's rising middle class and its newfound ability to travel and take vacations, has been growing steadily. Las Vegas Sands is particularly primed to take advantage of this trend, with more properties and more hotel rooms than any other company in Macau. 


Graphic: Las Vegas Sands 2014 earnings presentation.

Las Vegas Sands will strengthen its dominance when The Parisian resort opens on the Cotai Strip, slated for early next year. This massive integrated resort will feature 3,000 hotel rooms, further readying Sands for Macau's mass-market growth. Compare that to Wynn's and MGM's coming Macau resorts, which each feature 2,000 or fewer rooms and will open later than The Parisian. 

In fact, Las Vegas Sands has proved itself the leader in getting in front of important trends across Asia. Take Singapore as an example. Wynn Resorts canceled plans for a casino on the island nation due to governmental hurdles. Las Vegas Sands, on the other hand, secured one of the government's two casino licenses (the other going to Malaysian gaming company Genting). Sands' Singapore operations were a key reason the company posted a successful fourth quarter while other gaming companies were posting declines. 
 

Singapore's iconic tourist resort - Marina Bay Sands. Image: Las Vegas Sands.

Its success in Macau and Singapore makes Las Vegas Sands appear to be the best bet on a potential new casino in Japan. MGM and Wynn will also both try to get property in Japan, a gambling market analysts expect could be the second-largest in the world behind Macau, if the government allows casinos. The Japanese prime minister, a major supporter of allowing casinos in the nation, visited the Marina Bay Sands resort in Singapore and has said he would like to see that kind of model in Japan. 

The best bet for a tough first quarter
Last year's first quarter set records for most of these companies, led by a major boost from Macau operations. All of 2013 was good for the companies with the biggest bets there, which is why when things turned south in the second through fourth quarters of 2014 it looked even worse when compared to the huge success of year-ago periods. Because first-quarter 2014 was also a success, expect first-quarter 2015 to look like the worst quarter yet of this recent slump as Macau continues to drain gaming revenue. 

The coming first-quarter slump will be a major issue for Wynn, which is still dependent on Macau for its growth. MGM would be doing well just to post a profit, as it is continually posting net losses while it struggles to make its U.S. properties profitable. Las Vegas Sands will likely have a much better quarter, and might repeat its fourth-quarter success of rising year-over-year income thanks to increased income from Singapore and better operations. 

The best bet for the value
Las Vegas Sands also has the strongest balance sheet of the group, consistently proving to be the most profitable company. In 2014, Sands grew its total income by 23% year over year, to $2.84 billion. Compare that to Wynn's 4% income decline in 2014, bringing it to $963 million. MGM actually ended the year with a widened net loss of $150 million.  

Because of its success in getting in early on the most important global gaming trends, continually posting the most profit, having the best balance sheet, and eyeing good news in the coming earnings cycle, Las Vegas Sands is also the cheapest to buy.

At a P/E of just 15.6 times, Sands is cheaper than Wynn at 17.8 times earnings and MGM at around 56 times earnings. For all of these reasons, I continue to be bullish on Las Vegas Sands for the long term, something that I can't say about MGM or Wynn.