Wynn Resorts Ltd

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.

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.

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.

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.

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 […]

Share prices for most of the gambling stocks declined significantly over the last three months. MGM Resorts (MGM) declined 14.9%.

For November 2016, visitor arrivals remained unchanged as compared to November 2015 and fell 3.4% month-over-month to 2.6 million visitors.

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 […]

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.

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.

Morgan Stanley expects that exponential growth in the U.S. online gaming market could happen through interstate online poker and wide-area progressive slots.

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.

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.

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.

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.

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.

Stocks of major Macao casinos have been on the rise since September 2016 when casino revenues started rebounding.

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.

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.

MGM derives 34% of its revenues, respectively, from Macau. Since MGM has comparatively less exposure to Macau, its share price hasn’t been volatile.

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.

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 derives one-third of its revenue from China. It witnessed a significant decline in revenue and earnings due to a lack of VIP participation.

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.

When inflation decreases, consumers have greater purchasing power and a higher spending capacity. This is a positive sign for casino resort companies.

Currently, MGM operates 15 wholly-owned resorts in the U.S. MGM China’s operations include MGM Macau and the development of MGM Cotai.

MGM Resorts (MGM) is a global hospitality and entertainment company. MGM develops, builds, and operates destination resorts. MGM was founded in 1986.

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 […]

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.

Bond markets are experiencing rising yields due to higher economic growth expectations. However, the 10-Year Treasury yield was still low at 2.4% on March 29, 2017

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.

Macao’s shift from VIP gaming to the mass gaming market and non-gaming revenue is expected to benefit Macao in the long run.

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.

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 Enterprises (IEP) owns 68% of the outstanding stock of Tropicana Entertainment through Icahn Enterprises Holding LP (IEH).

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 […]

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 […]

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% […]

MGM Resorts (MGM) was founded in 1986. MGM is based in Nevada. It’s one of the leading global hospitality and entertainment companies.

Caesars Entertainment has 51 casinos in 13 U.S. states and five countries. 38 are in the U.S. and primarily consist of land-based and riverboat casinos.

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 […]

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: 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 […]

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 Entertainment’s mass market table games segment is still the major driver in Macau. In 2014, Macau’s visitation increased by 7.5% YoY.

With over 9,000 hotel rooms, Sands China (LVS) has the largest share of the total hotel inventory in the Macao region, at 60%.

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.

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.

Casino operators may want to add more non-gaming amenities in 2015. This will strengthen customer spending after a year of slow casino revenues.

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 EBITDA at Marina Bay Sands in Singapore doubled, reaching a property record of $518.5 million, up ~100% year-over-year.

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’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.

Established in 2004, Melco Crown Entertainment (MPEL) owns, develops, and operates casino gaming and entertainment resort facilities. It’s focused on Asia.

For the full year ending December 31, 2014, Melco Crown Entertainment reported net revenue of $4.8 billion—down 5.9% YoY.

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.

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 (WYNN) earns its revenues through casinos, hotels, food and beverages, and entertainment and retail operations.

Wynn Resorts (WYNN) is currently constructing Wynn Palace, a fully integrated resort in the Cotai area of Macau.

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’ 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 […]

Wynn Resorts (WYNN) is a leading developer, owner, and operator of destination casino resorts.

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 table wins increased due to a shift of gaming tables from the VIP to the mass market.

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.

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.

Melco Crown Entertainment has two casino-based operations—City of Dreams and Altira Macau—and noncasino-based operations at its Mocha Clubs.

Members of management owning shares of their company shows confidence in the firm’s direction and outlook.

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 […]

On a year-over-year basis, real disposable income increased 2.9%. More disposable income boosts consumer buying power.

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 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.

Today, a number of US-based casino companies have operations in foreign markets—like Macau. Also, they’re developing new properties in Macau.

Carnival, which is a US-based cruise company and the world’s largest travel leisure company, was the S&P 500’s top loss on June 5.

Last week marked the end of earnings season with 99% of companies in the S&P 500 having reported.

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.”

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’s casinos are trying to change Macao from a gaming-only destination to more of a Las Vegas–like destination.

Macao’s annual inflation as measured by the composite consumer price index rose 1.03% YoY (year-over-year) in July 2017.

In 2000, the unemployment rate in Macao peaked at 7.0%. Since then, tremendous growth in the gaming industry has helped reduce unemployment.

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%.

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.

For the first quarter of 2017, VIP gross gaming revenues rose 16.8% YoY (year-over-year) to MOP 35.6 billion.

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).

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 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.

Macao casinos’ $28 billion investment in integrated resorts is set to change the city’s gaming business.

Sands Parisian opened its resort in September 2016 and has been leading the mass market recovery ever since.

As VIP business continues to remain sluggish, casinos are increasingly turning their attention towards the mass market.

The annual inflation in Macao fell to 1.5% in November 2016.

For September 2016 through November 2016, the unemployment rate stood at 1.9%.

Macao casinos’ $28-billion investment in integrated resorts will change the city’s gaming. Capacity additions should increase the number of slot tables too.

As VIP business remains sluggish, casinos are increasingly turning their attention to woo mass market.

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.

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.

After 26 consecutive months of declining revenues, Macao gaming revenues have finally shown a small spurt of growth.

Casino operators that have opened resorts on the Cotai Strip are gaining market share at the expense of those who haven’t.

Wyndham Worldwide’s Wyndham Exchange and Rental segment is its most geographically diversified business segment, with a presence in over 100 countries.