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.”
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% […]
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% […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
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.
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
As of January 3, 2016, the Macao casino industry valuation stands at 12.6x. This valuation is lower than the industry average valuation of 12.05x since February 2008.
Macao casinos’ $28-billion investment in integrated resorts will change the city’s gaming. Capacity additions should increase the number of slot tables too.
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.
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.
Macao, the largest gaming hub in the world, has seen big growth in the past decade but has also seen declines since China imposed restrictions in 2014.
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.
Introduced in September 1993, the MFS Growth Fund (MFEGX) has witnessed several market cycles. MFEGX was an above-average performer among the 11 funds in this review.
Wyndham Worldwide’s Wyndham Exchange and Rental segment is its most geographically diversified business segment, with a presence in over 100 countries.
In 2014, the US accounted for two-thirds of the rooms in Wyndham Worldwide’s total portfolio, followed by the Asia-Pacific at 16.5% and Europe at 8.2%.
Macao has seen extraordinary growth in the past decade and a half. It has also seen a similar fall ever since the Chinese government imposed anti-corruption restrictions in 2014.
The top performer in all periods except the three-month period, the T. Rowe Price Blue Chip Growth Fund rose by 9.9% in October over the previous month.
The Las Vegas Sands is focusing on controlling costs in the already weak Macao region. It generated better cash flows as it focused on the higher margin mass and non-gaming segments.
Wynn Resorts’ (WYNN) third quarter numbers missed most Wall Street analysts’ estimates. The company’s revenues for the third quarter fell to $996.3 million.
The third quarter earnings call from Wynn Resorts disappointed investors. The company’s already weak stock fell by more than 7% in after-hours trading.
The peers are way ahead of Wynn Resorts based on the price-to-sales ratio. The ETFs outperformed Wynn Resorts based on the price movement and PE ratio.
As of October 12, 2015, Las Vegas Sands’ (LVS) valuation multiple stands at 11.7x. This is lower than its average forward EV-to-EBITDA multiple of 16.14x.
Las Vegas Sands is expected to continue reporting grim earnings in 3Q15.
Analysts expect LVS to post a year-over-year decline in earnings per share and revenue, driven by weakness in business.
The gaming industry has been heavily dependent on Macao, and the Chinese economy’s troubles don’t seem to be going away soon. Companies are finding new destinations in Japan and Korea to develop the next Macao.
Las Vegas Sands (LVS) stock remained relatively flat or slightly lower in July and August. But the steepest fall came in September, dragging the stock down about 18% in a short time span.
Las Vegas Sands (LVS) had a difficult second quarter, missing both top line and bottom line estimates. The top line fell 19.4%, while operating income fell 28.3%.
After witnessing a decade of exceptional growth in revenues, the Macao casino industry is going through its worst fall with July marking 14 straight months of declining gaming revenues.
A major percentage of visitors at the Macao casinos are from China. In May 2015, the visitors from China contributed to about 66% of the total arrivals.
Macao’s gaming revenue per visitor was at 999.6 Macanese pataca in May 2015—a rise of 6% from 942.4 in April 2015. This came after a huge fall in April 2015.
The casino industry in Macao witnessed its 13th straight month of falling revenue in June 2015. For June, the revenue fell by about 36% YoY to $2.17 billion.
Macau’s restriction on using China UnionPay debit cards at casinos to curb illegal money flow could be a factor in February’s drop in gambling revenues.
The US unemployment rate increased slightly in January to 5.7% compared to 5.6% in December. The number of new jobs in January was expected to be 234,000.
The US consumer sentiment index was 98.1 in January, up from 93.6 in December. This is an 11-year high, the highest on a final basis since January 2004.
Real disposable income increased 3.7% year-over-year. This boosts consumer buying power and means consumer spending in leisure activities may increase.
Revenue per available room (or RevPar) was $122.03 in January 2015, up 10.2% year-on-year. RevPAR increased on account of pricing improvements at the Strip.
MGM’s share price hasn’t been impacted much by the anti-corruption campaign in China. The campaign took a toll in 3Q14. Its business has ~33% exposure in Macau.
Chilton Investment Company decreased its position in Wynn Resorts (WYNN), which accounted for 1.25% of the fund’s 3Q14 portfolio when compared to 0.13% in 4Q14.
