MGM Resorts International
Must-know: A breakdown of Las Vegas Sands’ revenue
Las Vegas Sands (LVS) earns revenue through casinos, hotels, food and beverages, and convention or retail operations. The company’s main revenue driver is casino revenue. It’s generated from slot machines and table games. Casino revenue represents ~79% of the total revenues.
Must-know: Important performance metrics for casino resorts
The occupancy rate is very important for casino resorts. The occupancy rate shows the relationship between the number of occupied rooms and the total number of rooms.
Must-know: The most popular casino games
Casinos’ popularity is growing. This suggests that people like to gamble occasionally. Unfortunately, they don’t always win. For most of the people, the real fun is playing the game—not necessarily winning.
Can New Resorts Lead the Way in Macao Casinos’ Recovery?
Wynn Resorts opened its $4.1 billion Wynn Palace on August 22, 2016, and this may have directly contributed to Macao’s casino industry recovery in August.
Why Caesars Entertainment has a massive $24 billion debt
Texas Pacific Group and Apollo Management took Harrah’s Entertainment, now Caesars Entertainment, private in a leveraged buyout deal valued at $30.7 billion in 2008.
What Bond Mutual Fund Investors Can Do in a Liquidity Squeeze
Things look fine for now Previously in this series, we discussed how mutual funds have a notably larger holding of corporate bonds at present than they had before the financial crisis of 2008. We’ve also talked about how regulatory changes could impact the role of banks as market makers. At the same time, the role […]
Why Investors Should Watch Macao’s Unemployment Rate
Unemployment rate The unemployment rate indicates the percentage of the labor force that is currently unemployed but actively seeking employment. In 2000, the unemployment rate in Macao peaked at 7%. Since then, tremendous growth in the gaming industry has helped reduce employment in Macao. Unemployment averaged 3.8% between 1996 and May 2017. Between January and […]
Must-know: MGM’s relative share price performance
Share prices for most of the gambling stocks declined significantly over the last three months. MGM Resorts (MGM) declined 14.9%.
Is Macao’s Visitor Arrival Trend Improving?
For November 2016, visitor arrivals remained unchanged as compared to November 2015 and fell 3.4% month-over-month to 2.6 million visitors.
High Yield Bond Issuance Hit 2016 Record Last Week
High yield bond issuance surged last week and hit its highest level in 2016 yet due to continued growth in volume.
Macao Revenue Beats Expectations by a Wide Margin
May revenue marks a high point According to the Gaming Inspection and Coordination Bureau, Macao’s gross gaming revenue has risen 23.7% YoY (year-over-year) to 22.7 billion Macao patacas, or $2.8 billion. The revenue growth beat analysts’ estimate by a wide margin. Analysts had forecast Macao’s May revenue to grow 16.5% YoY. May marks the tenth consecutive […]
Must-know: Money laundering and terrorist financing in casinos
The money laundering process takes place in three phases—Placement, Layering, and Integration. Casino regulators make sure that gaming is conducted honestly. They approve the game rules.
Why China’s anti-corruption campaign hurts Macau
Xi Jinping—the Chinese President and General Secretary of the Communist Party—recently launched an unprecedented anti-corruption campaign. This campaign investigated and prosecuted hundreds of officials across the nation.
Why the US online gambling industry could be $5.2 billion by 2020
Morgan Stanley expects that exponential growth in the U.S. online gaming market could happen through interstate online poker and wide-area progressive slots.
Key Indicators And Recent Trends In The Casino Industry
Casino gambling is spread across major destinations around the world. Casinos, at major destinations, are being influenced by certain factors. This is hampering industry growth.
Must-know: Key performance metric tracked by Las Vegas Sands
Adjusted property EBITDA shouldn’t be regarded as an alternative to looking at income from operations, which indicates operating performance. Nor is it an alternative to looking at cash flow from operations, which measures liquidity.
Why investors should watch casino industry indicators and trends
Casino gaming is a business that’s spread across the world. Major casino destinations include Las Vegas, Macau, and Singapore. There are regional venues across all the continents.
Must-know Wall Street ratings on Las Vegas Sands
Two analysts rated the stock as neutral or hold, and six assigned a buy or overweight rating to the stock. The company’s consensus rating is buy. And its consensus mean price target is ~$71.
Why investors should learn about MGM’s top shareholders
As an investor, you should know whether or not MGM’s (MGM) management is committed to its future. Management shows its commitment by owning shares.
Casino Stocks Lose Recovering Streak in August
Stocks of major Macao casinos have been on the rise since September 2016 when casino revenues started rebounding.
Why MGM’s liquidity could be a concern for investors
Liquidity ratios determine a company’s ability to meet its short-term obligations. A company’s liquidity position can be measured by using the current ratio or the quick ratio.
Leveraged Loan Funds Witnessed a Small Outflow Last Week
According to data from Lipper, leveraged loan funds saw outflows for the third consecutive week. The quantum of outflows came in at $73 million last week.
Why Baccarat gambling provides revenue for the Las Vegas Strip
The casinos in the Las Vegas Strip clearly benefit from high-end Baccarat play. Over the last four years, Baccarat revenue ranged from 43.5% of table games revenue in 2011 to 48.2% in 2013.
Why MGM’s share price isn’t as volatile as its peers
MGM derives 34% of its revenues, respectively, from Macau. Since MGM has comparatively less exposure to Macau, its share price hasn’t been volatile.
Why Las Vegas Sands is committed to creating shareholder value
Las Vegas Sands paid a recurring quarterly dividend of $401.2 million, or $0.50 per common share during Q3 2014, up 42.9% year-over-year.
Macao’s Visitor Arrivals Improve in May 2017
Visitor arrivals increase In May 2017, visitor arrivals rose 3.7% YoY (year-over-year) to 2.6 million visitors. However, month-over-month, visitor arrivals fell 6.3%. Visitor arrivals have been improving since September 2016, except in February 2017, when they fell 5.6% to 2.5 million visitors. In the first five months of the year, visitor arrivals in Macao rose 6.3% […]
MGM’s earnings plunged, but domestic operations set a record
MGM derives one-third of its revenue from China. It witnessed a significant decline in revenue and earnings due to a lack of VIP participation.
Las Vegas Sands’ solid performance in hotel segment
RevPAR is the most important of all the performance metrics used in the hotel industry. It captures both room rates and occupancy levels, giving information about how well a company fills its rooms, and how much it’s able to charge.
Macau’s inflation rate falls again
When inflation decreases, consumers have greater purchasing power and a higher spending capacity. This is a positive sign for casino resort companies.
Why investors should look at MGM’s operating segments
Currently, MGM operates 15 wholly-owned resorts in the U.S. MGM China’s operations include MGM Macau and the development of MGM Cotai.
Why MGM Resorts generates its revenues from two segments
MGM Resorts (MGM) is a global hospitality and entertainment company. MGM develops, builds, and operates destination resorts. MGM was founded in 1986.
What Macao’s Inflation Rate Indicates
Inflation rate Inflation is an overall rise in the price of goods and services in an economy, leading to the fall in purchasing power of money. Macao’s annual inflation, as measured by the composite consumer price index, rose 0.95% YoY (year-over-year) in May 2017, higher than the 0.8% increase seen in April. Macao’s inflation has […]
Why capital expenditures are important for MGM Resorts
Capital expenditure is obtained to buy fixed assets or add to the value of an existing fixed asset. MGM’s senior credit facility limits the its capital expenditures to $500 million per fiscal year.
Why Chinese gamblers influence Macau casinos
Growth in visitors from mainland China remained at 13% in August 2014 on a year-over-year (or YoY) basis. Macau’s monthly visitors surged over three million in August 2014.
The Valuation of Macao Casino Stocks
Macao’s shift from VIP gaming to the mass gaming market and non-gaming revenue is expected to benefit Macao in the long run.
Macao Casino Industry Valuation: What’s Priced In?
As of December 10, 2015, the Macao casino industry’s valuation stands at 12.9x. This is close to the industry average valuation of 12.5x in April 2008.
Macao to See High Growth In Hotel Room Supply
New inventory The new integrated resorts opened last year by Melco Resorts & Entertainment (MLCO) and Wynn Resorts (WYNN), and those slated to open in the next two years, are set to increase Macao’s hotel inventory by more than a third. At the end of April, Macao had approximately 37,000 rooms. This figure is expected […]
Icahn’s Tropicana Entertainment: The Gaming Company
Icahn Enterprises (IEP) owns 68% of the outstanding stock of Tropicana Entertainment through Icahn Enterprises Holding LP (IEH).
Are New Integrated Resorts Expanding Macao’s Market?
Increasing market In the past four months, Macao’s gross gaming revenue has grown. Many analysts believe that the growth is not coming from cannibalization of existing casinos, but growth in the overall market size due to a shift to the mass market. Macao’s revenue grew 18% YoY (year-over-year) in February and March, followed by a […]
Macao’s Mass Market Growth Story Remains Promising
VIP revenue driving short-term growth The recent growth in Macao casino revenue has been driven by the VIP segment. In the first quarter of 2017, VIP gross gaming revenue grew 16.8% YoY (year-over-year) to 35.6 billion Macao patacas. The VIP segment is also showing good signs. The repayment cycle has been maintained at a healthy 20 […]
What Analysts Recommend for Major Casino Stock
Analyst recommendations Analysts favor MGM Resorts (MGM) stock over other major casinos’. All 20 analysts tracking the stock recommend “buy.” Seven (35%) of these analysts have “strong buy” recommendations, while the remaining 75% have “buy” recommendations. For Melco Resorts & Entertainment (MLCO), 15 (68.2%) of the 22 analysts tracking the stock recommend “buy,” and 31.8% […]
Must-know: Caesars Entertainment’s recent 2Q14 results outlook
Caesars Entertainment reported a Q2 loss of $466.4 million, or $3.24 a share, as compared to last year’s Q2 loss of $212.2 million, or $1.69 a share.
Must-know: An overview of MGM Resorts
MGM Resorts (MGM) was founded in 1986. MGM is based in Nevada. It’s one of the leading global hospitality and entertainment companies.
Analyzing Macao Casinos’ Valuation
Current industry valuation As of June 23, 2017, the Macao casino industry’s valuation stands at 12.1x. However, the average valuation for 2017 is much lower, at 11.3x. However, this valuation is a definite improvement from the lows seen in 2015, when the industry valuation averaged at 9.6x. The industry saw its highest valuation of 16x […]
Las Vegas Sands’ major sources of revenue
Tables contribute only 6% to the total number of slot machines and tables combined in the U.S. Clearly, table games are more popular in Asia than in the U.S.
China’s Economy May Spoil Macao’s Party
China: The key market The Macao region relies heavily on the Chinese mainland, as it garners a huge majority (about 67%) of its visitors and VIP gamers, from China and its neighboring countries. The weakness in the Chinese economy will adversely affect the spending capacity of people in the country, which could lead to a […]
Why Caesars Entertainment’s stockholders’ equity is negative
Caesars Entertainment’s (CZR) stockholders equity is negative, according to its latest balance sheet. Stockholder equity consists of capital contributed and retained earnings.
Melco Crown is positioned to exploit mass market growth in Macau
Melco Crown Entertainment’s mass market table games segment is still the major driver in Macau. In 2014, Macau’s visitation increased by 7.5% YoY.
Macao Hotel Inventory to Double amid Falling Occupancy
With over 9,000 hotel rooms, Sands China (LVS) has the largest share of the total hotel inventory in the Macao region, at 60%.
Must-know: Las Vegas Sands’ future prospects
Japan is thinking about opening its market to casinos in the near future. Legalizing casinos in Japan is a long-term catalyst for the casino industry. Las Vegas Sands (LVS) has a huge potential for growth in Japan. The growth in Japan could be as big as the growth in Macao.
Buy MGM Stock before Casino Boom Returns
Today at 7:47 AM ET, MGM Resorts International (NYSE:MGM) stock rose 5.7% to $21.43 in the pre-market session. The stock rose 11.3% on Wednesday.
Macau Casinos May Struggle In Early 2015
Macau’s gaming slowdown may continue into 2015. It’s due to a lack of new resorts. Macau’s casino gambling revenue is expected to keep declining until mid-2015.
Casinos May Look To Expand Non-Gaming In 2015
Casino operators may want to add more non-gaming amenities in 2015. This will strengthen customer spending after a year of slow casino revenues.
Online Gambing Generated Over $100 Million In New Jersey
New Jersey allows gambling on casino games and poker. Currently, it dominates the market. It has ~90% of total US online gaming revenue.
Las Vegas Sands’ adjusted property earnings double in Singapore
Las Vegas Sands’ adjusted property EBITDA at Marina Bay Sands in Singapore doubled, reaching a property record of $518.5 million, up ~100% year-over-year.
VIPs are cautious as Wynn Resorts’ table games win suffers
WYNN’s VIP table games drop in 4Q14 was $20.7 billion, 39.9% lower than 4Q13. Drop is cash and net markers issued and deposited in a gaming table drop box.
Wynn Resorts’ EBITDA takes its biggest nosedive since 2009
WYNN’s adjusted property EBITDA fell a whopping 29.3% year-over-year to $352 million, the biggest year-over-year fall since the second quarter of 2009.
Melco Crown Entertainment’s operations are focused on Asia
Established in 2004, Melco Crown Entertainment (MPEL) owns, develops, and operates casino gaming and entertainment resort facilities. It’s focused on Asia.
Melco Crown Entertainment’s 4Q14 revenue decreased
For the full year ending December 31, 2014, Melco Crown Entertainment reported net revenue of $4.8 billion—down 5.9% YoY.
Why Melco Crown’s rolling chip volume decreased in 4Q14
Rolling chip volume refers to the amount of non-negotiable chips wagered and lost by the rolling chip market segment. It’s largely represented by VIP players.
Why The Casino Business Is Affected By Inflation
When inflation is low, consumers have greater purchasing power. They have a higher spending capacity. Greater purchasing power is a positive sign for casino resort companies.
Wynn Resorts: A revenue breakdown
Wynn Resorts (WYNN) earns its revenues through casinos, hotels, food and beverages, and entertainment and retail operations.
Recent developments for Wynn Resorts
Wynn Resorts (WYNN) is currently constructing Wynn Palace, a fully integrated resort in the Cotai area of Macau.
Wynn Resorts’ liquidity position improves
Wynn Resorts’ strength in meeting its short-term obligations has improved. The increase was mainly attributable to a decrease in accounts payable and gaming taxes payable and an increase in cash and cash equivalents during the nine months ended September 30, 2014.
Wynn Resorts’ management team brings a lot of experience
Wynn Resorts’ strong management Strong management is the backbone of a successful organization. Wynn Resorts’ (WYNN) senior executive team has an average of more than 25 years of experience in the hotel and gaming industries. Wynn Resorts is part of an exchange-traded fund (or ETF) like the Consumer Discretionary Select Sector Standard and Poors depositary […]
An overview: Wynn Resorts and its business segments
Wynn Resorts (WYNN) is a leading developer, owner, and operator of destination casino resorts.
Wynn Resorts’ VIP gaming fails to deliver
Wynn Resorts’ (WYNN) VIP table gaming’s drop in 3Q14 was 17.4% lower than the same quarter in 2013. The Macau VIP gaming revenues have been negatively impacted by the ongoing anti-corruption campaign in China.
Mass market segment outperforms at Wynn Resort’s Macau operation
Mass market table wins increased due to a shift of gaming tables from the VIP to the mass market.
Melco Crown Burdened With Heavy Gaming Taxes
MPEL’s room expenses comprise ~1% of its direct costs, mainly representing the costs in operating its hotel facilities at Altira Macau and City of Dreams.
Why Melco Crown Is Profitable In The Casino Space
MPEL derives ~94% of revenues from casino operations. Its casino business gross margin is 50% for the trailing 12-month period ending September 30, 2014.
Cost of Equity Deteriorating Melco’s WACC
Melco Crown Entertainment’s ROIC has been lower than its weighted average cost of capital for most of the last three years.
A Business Overview Of Melco Crown Entertainment
Melco Crown Entertainment has two casino-based operations—City of Dreams and Altira Macau—and noncasino-based operations at its Mocha Clubs.
Must-Know: Melco Crown’s Major Shareholders
Members of management owning shares of their company shows confidence in the firm’s direction and outlook.
Melco Share Price Drops, But Outperforms In The Long Run
Price performance Let’s explore the five-year share price performance of Melco Crown Entertainment (MPEL) relative to its peers, as well as the broader market that includes SPDR S&P 500 ETF (SPY). Share prices of gambling stocks collapsed heavily over the last three to six months. This drop largely resulted from the Chinese government’s crackdown on corrupt officials, which negatively […]
Why Casinos Rely On Disposable Income
On a year-over-year basis, real disposable income increased 2.9%. More disposable income boosts consumer buying power.
Why China’s Disposable Income Could Drive Leisure Demand
China’s disposable income per capita remained almost flat at 6,800 Chinese yen on a YoY basis for the three months ending in December 2014.
An important overview of Las Vegas Sands, a casino company giant
An overview of Las Vegas Sands (LVS) shows that the company currently owns 70.1% of Sands China Ltd., which operates LVS’s four Macao properties.
Why the US casino market performed well
Today, a number of US-based casino companies have operations in foreign markets—like Macau. Also, they’re developing new properties in Macau.
What Analysts Are Recommending for Major Casinos
Analysts seem to be favoring MGM Resorts (MGM) stock over the other major casinos. Of the 17 analysts tracking the stock, 16 of them recommend a “buy.”
China’s Economy: A Slowdown in Second Half of 2017?
A weakness in the Chinese economy could adversely affect the spending capacity of the Chinese people, which could lead to fewer visitors at Macao.
Macao Casinos Hope Hotel Supply Will Drive Demand
Macao’s casinos are trying to change Macao from a gaming-only destination to more of a Las Vegas–like destination.
What Do Inflation Numbers in Macao Indicate?
Macao’s annual inflation as measured by the composite consumer price index rose 1.03% YoY (year-over-year) in July 2017.
What Unemployment Numbers Tell about Macao Casinos
In 2000, the unemployment rate in Macao peaked at 7.0%. Since then, tremendous growth in the gaming industry has helped reduce unemployment.
Macao Visitor Arrivals Improve in July 2017
For July 2017, visitor arrivals increased 4.4% YoY to 2.9 million visitors. However, on a month-over-month basis, visitor arrivals increased 22.7%.
Are the New Integrated Resorts Increasing Macao’s Market?
Macao’s gross gaming revenue growth in the past four months has many analysts believing that the growth is driven by the shift to the mass market.
VIP Segment Driving Macao Casinos’ Short-Term Recovery
For the first quarter of 2017, VIP gross gaming revenues rose 16.8% YoY (year-over-year) to MOP 35.6 billion.
Macao July Revenues Saw Highest Growth in 2017, Beat Expectations
According to the Gaming Inspection and Coordination Bureau, Macao’s gross gaming revenues have risen 29.2% YoY to MOP 23.0 billion ($2.9 billion).
Why Should Investors Keep a Watch on Macao’s Unemployment Rate?
Macao’s unemployment rate was as high as 7% in 2000. Growth in the tourism and gaming industry helped to curb the high rate.
Macao’s Gaming Revenues Posted Double-Digit Growth in February
Macao’s casinos reported their seventh consecutive month of revenue growth in February 2017. Casinos’ February revenues rose 18% year-over-year (or YoY) to ~$2.9 billion.
Is Oversupply a Concern for Macao Casinos?
Macao casinos’ $28 billion investment in integrated resorts is set to change the city’s gaming business.
Can New Resorts Lead the Way to Recovery for Macao Casinos?
Sands Parisian opened its resort in September 2016 and has been leading the mass market recovery ever since.
Is the Mass Market Shift Working for Macao Casinos?
As VIP business continues to remain sluggish, casinos are increasingly turning their attention towards the mass market.
What Do Macao’s Inflation Figures Indicate?
The annual inflation in Macao fell to 1.5% in November 2016.
Why Should Investors Keep an Eye on Macao’s Unemployment Rate?
For September 2016 through November 2016, the unemployment rate stood at 1.9%.
Hotel Inventory Is Rising, but Is There Enough Demand?
Macao casinos’ $28-billion investment in integrated resorts will change the city’s gaming. Capacity additions should increase the number of slot tables too.
How Macao’s Attempts to Woo Mass Market Consumers Are Going
As VIP business remains sluggish, casinos are increasingly turning their attention to woo mass market.
What Do Macao’s Inflation Numbers Indicate?
The annual inflation in Macao fell to ~2.1% in July 2016. Inflation has, in fact, been on a declining trend in the region since February 2016.
Why Macao’s Unemployment Rate Should Stay on Investors’ Radars
Macao’s unemployment rate reached 7% in 2000. Growth in tourism and gaming helped curb high rates, bringing the average down to ~3.9% from 1996 to May 2016.
Revival or Luck: Analysts’ Takes on Macao’s Revenue Rise
After 26 consecutive months of declining revenues, Macao gaming revenues have finally shown a small spurt of growth.
Leveraged Loans Issuance Hit Year-to-Date Record Last Week
The US leveraged loans market saw an allocation of $9.0 billion worth of dollar-denominated senior loans in the week to April 8.