Casino operator Las Vegas Sands (
) reported its highest ever quarterly earnings last week. Is now
the time to jump into this stock?
[caption id="attachment_76902" align="alignright" width="300"
caption="The Sands Macau"]
impressive numbers from its Macao operations
, Las Vegas Sands saw quarterly net revenues increase 19.5%
year-over-year during the busy Chinese New Year Season.
Importantly, results from the Sands China division jumped 39% from
the same quarter a year earlier.
The company's fantastic Macao numbers were bolstered by both its
flagship Venetian property and the opening of its newest
development, Sands Cotai Central. The latter provided Las Vegas
Sands with an additional $587.2 million in net revenue and is an
integral component of the company's strategy to capture additional
mass market gamers.
As well, Las Vegas Sands' American assets reported incremental
growth - 7% in Las Vegas and 6% in Pennsylvania.
However, the quarter for Las Vegas Sands had some blemishes:
some of the firm's other properties around the world are not
performing as well as its Macanese ones. Marina Bay Sands, the
company's Singapore offering, saw a 6.3% decline in net revenue.
Although Las Vegas Sands would ideally like to see growth in the
Singaporean market, Marina Bay Sands is still a lucrative asset,
bringing in $795 million in net revenues.
Unsurprisingly, Las Vegas Sands has seen a steady increase in
the value of its stock since reporting earnings. However, the
equity appears to be running into a bit of short-term resistance at
the 57.8 level. If the stock can close above 58, we could see Las
Vegas Sands test its 2011 high in the low 60's.
For long-term investors, the Macao gaming story remains a
compelling one; in particular, Las Vegas Sands, with its multiple
assets on the Cotai Strip and
its advantageous position
in the mass market sector, could be a winner. However, if the
growth rate in the Chinese economy falls further, Las Vegas Sands
could be adversely affected.
Author is long LVS