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Interesting LVS Put And Call Options For June 8th
Thursday, April 26, 11:15 AM ET, by Market News Video Staff

Investors in Las Vegas Sands Corp (LVS) saw new options become available today, for the ...

MGM Crosses Below Key Moving Average Level
Thursday, April 26, 11:20 AM ET, by Market News Video Staff

In trading on Thursday, shares of MGM Resorts International (MGM) crossed below their 200 day ...

WYNN June 8th Options Begin Trading
Thursday, April 26, 11:30 AM ET, by Market News Video Staff

Investors in Wynn Resorts Ltd (WYNN) saw new options begin trading today, for the June ...

Notable Thursday Option Activity: LVS, SQ, VRTX
Thursday, April 26, 3:24 PM ET, by Market News Video Staff

Among the underlying components of the Russell 3000 index, we saw noteworthy options trading volume ...

VXF, TSLA, LVS, WP: Large Outflows Detected at ETF
Friday, April 27, 10:52 AM ET, by Market News Video Staff

Symbols mentioned in this story: VXF, TSLA, LVS, WP Exchange traded funds (ETFs) trade just ...

Casino Stocks: Turbo-Growth From Rising Asian Wealth

By ETF Channel Staff, Monday, September 26, 12:06 PM ET
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Article by Frank M. Bifulco, CFA - Alcott Capital Management

“Go West Young Man, Go West” was the advice from Horace Greeley. No doubt the folks who built Las Vegas took that to heart as they made the gambling mecca a multi-billion dollar colossus the last 60 years. But Greeley may not have told his protégé to go far enough west – for the real action is in Macau, the ex-Portuguese colony off the coast of China that is fast-becoming a turbo-charged version of Las Vegas.

The Chinese government strictly controls gambling licenses so the problems that hit Las Vegas with over-supply and competition from Atlantic City and Indian casinos are not an issue. While the mature markets of Las Vegas and Atlantic City struggle for revenue growth (AC is actually 40% below its 2007 peak), Macau continues to grow revenues at an astronomical rate, fueled by newfound Chinese and Asian wealth. Recent year-over-year revenue growth for Macau casinos are in excess of 50%. Las Vegas and Macau were at parity in 2006; Macau may finish 2011 with 5x as much revenue as Las Vegas. Many of the Asian high-rollers frequenting Macau used to go to Las Vegas or Atlantic City because there were no closer options. Now there are.

Wynn Resorts Ltd. (NASDAQ:WYNN) is run by the legendary Steve Wynn (Golden Nugget, Mirage) and trades for about $140 or 24x 2012 EPS. Las Vegas Sands (NYSE:LVS), run by Sheldon Adelson, trades about $45 or 19x 2012 EPS. Both companies have gaming venues around the globe, including Las Vegas, so they are not pure-plays on Macau. But Macau is the growth engine that separates them from U.S. domestic plays. MGM Resorts International (NYSE:MGM) and Melco Crown Entertainment (MPEL) are more aggressive plays on Macau and Asia, both have less-seasoned management and higher operational and financial risks. Based on EV/EBITDA (which adjusts for differences in capitalization structure), Melco Crown is the cheapest in the group at about 8X EV/EBITDA on 2012 estimates, but also carries the highest risk because of financial and operating leverage to the higher-growth Asian markets. MGM Resorts trades at just under 10X EV/EBITA, and Las Vegas Sands and Wynn are at 13X and 11X, respectively.

There is only one pure gaming ETF – the Market Vectors Gaming ETF (NYSE:BJK) – and it is fairly small at just under $150 million in assets. LVS, WYNN, and MGM are all in the Top 10 holdings list which numbers over 50 stocks in total. Separately-listed entities for the Asian holdings of the U.S. casinos are also in BJK so you get a bit more ‘juice’ from the inclusion of Sands China and Wynn Macau. PowerShares Dynamic Leisure & Entertainment (NYSE:PEJ) ETF has casino stocks but is mostly a play on consumer discretionary spending. WYNN was the only casino stock in the Top 10 holdings for PEJ.

Full List of BJK Holdings

Full List of PEJ Holdings

Do you really feel lucky? Then you might want to take a look at International Game Technology (NYSE:IGT), the premier supplier of slot machines and other gaming equipment. If Las Vegas and Atlantic City recover in the U.S., then a new replacement cycle (including the Indian casinos) should boost domestic revenues while new casinos and expansion in Macau and Asia boosts overseas sales. IGT is a higher-risk, higher-reward play on domestic and global gaming so make sure you do your due diligence to prevent your investment from coming up snake eyes.


The ETF Channel Flexible Growth Investment Portfolio is designed to seek growth for investors — anywhere and everywhere. The key to the program is our portfolio strategy allows us complete flexibility in terms of asset allocation as there are no predetermined guidelines as to the level of stocks, bonds, cash, regions, countries, sectors, commodities, or even asset classes in the portfolio! In short, this is a completely flexible portfolio designed to follow the performance trail wherever it leads us.

This Article's Word Cloud:   Asia   Asian   Atlantic   China   Chinese   City   Crown   Entertainment   Full   Greeley   Holdings   Indian   International   List   Macau   Melco   NYSE   Resorts   Sands   Vegas   WYNN   West   Wynn   about   also   asset   because   casino   casinos   designed   domestic   financial   from   gambling   gaming   growth   have   higher   holdings   including   just   markets   over   plays   portfolio   revenue   stocks   that   there   trades
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