Melco Crown Entertainment (NASDAQ:MPEL)

CAPS Rating: 4 out of 5

The Company develops, owns, and operates casino gaming and entertainment resort facilities.

Recs

3
Player Avatar liszewski (99.96) Submitted: 3/16/2011 7:23:22 AM : Outperform Start Price: $6.94 MPEL Score: +316.23

It is a bad idea to short the casinos right now. I currently have some options exposure to the name and will likely favor owning it on and off over the foreseeable future when I want casino exposure. While I like LVS as well, I will take MPEL and the added risk/reward component. Macau is the future of gambling and these companies are going to benefit from it. The City of Dreams is Melco's crown jewel. The revenue growth witnessed here is amazing. There is also the added bonus of potentially waking up one morning to a buyout by one of the bigger gambling names. Incremental gross gaming revenue will boost the company's profitability significantly and also reduce concerns about the casino operator's financing plan. The Chinese are becoming wealthy at an alarming pace and they aspire to spend their new found wealth. This bodes very well for MPEL, at least until we see some signs that China growth (fabricated or not) is slowing.

Member Avatar liszewski (99.96) Submitted: 4/7/2011 1:59:06 PM
Recs: 0

Macau Gets JPMorgan More Bullish On Casinos

7:34 (Dow Jones) JPMorgan increases earnings and price targets on Las Vegas Sands (LVS), Melco (MPEL) and WYNN "on recent market-wide Macau data, our recent trip to Macau and Singapore and broad marketwide commentary from our Gaming & Lodging conference last week." While boosting its LVS and WYNN estimates, the investment bank notes they could still be moved higher as it sees "more attractive" growth risk/reward. Macau is the world's biggest casino spot by far and continues to report sharp growth, prompting the focus of US companies there. March gambling revenue on Macau surged 48% on year as Chinese visitors continue flocking to the island. LVS up fractionally premarket; others inactive. (kevin.kingsbury@dowjones.com)

Featured Broker Partners


Advertisement