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MGM Mirage Raises $826 Million – Analyst Blog

Zacks Market Commentaries — Fri, 19 Mar 2010 20:00:14 +0000

On Wednesday, MGM Mirage (MGM) closed a debt offering and raised approximately $826 million. The company used the proceeds from this offering to fulfill certain requirements for its amended credit facility agreement.

The company closed the private offering of $845 million of its 9% senior secured notes due March 2020. This generated net proceeds of $826 million.

MGM Mirage used the proceeds for the prepayment of approximately $820 million of loans under its senior credit facility and related fees and expenses. This prepayment helped it to fulfill the requirement for a 20% reduction to the credit exposures of the company's lenders.

Additionally, the prepayment resulted in a re-tranching of the company's senior credit facility pursuant to a restatement of the related agreement. The restated credit facility permits the extension of a significant part of the company’s credit facilities from October 2011 to February 2014.

In a separate development, MGM Mirage announced on Wednesday that the New Jersey Casino Control Commission (CCC) has approved the settlement agreement between the company and the New Jersey Division of Gaming Enforcement (DGE).

Under this agreement, the company will sell its 50% ownership interest in the Borgata Hotel Casino & Spa and related leased land in Atlantic City. The company’s ownership in Borgata comes through a 50-50 joint venture with Boyd Gaming Corporation, whose interest is not affected by the settlement.

MGM Mirage’s management also said that the DGE's report acknowledged the lack of evidence that Pansy Ho, MGM’s joint venture partner in Macau, has engaged in any wrongdoing or been accused of any illegal activity.

Last month, MGM Mirage reported a fourth-quarter loss of 25 cents per share, worse than the Zacks Consensus Estimate of a loss of 14 cents. Though the cost cut initiatives provided some relief to the bottom line, the company’s earnings continue to be impacted by the economic downturn. The company continued to experience pressure on room rates in Las Vegas that heaved on its margins.

Shares of MGM Mirage were down 35 cents or 2.85% to $11.91 on Thursday.
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Zacks Investment Research

Macau’s Retail Sales Up 16% In 2009

China Retail News — Thu, 04 Mar 2010 19:30:14 +0000

Data released by Macau Statistics and Census Bureau shows that Macau's retail sales reached MOP22.11 billion in 2009, an increase of 16% over those of 2008. The data shows that Macau's retail sale saw a dramatic increase in the fourth quarter of 2009, reaching MOP6.48 billion, which was an increase of 28% over those of the [...]

Wynn Misses, Narrows Loss – Analyst Blog

Zacks Market Commentaries — Fri, 26 Feb 2010 21:09:12 +0000

Wynn Resorts Ltd.’s (WYNN) fourth quarter earnings of 8 cents per share missed the Zacks Consensus Estimate of 12 cents. The company had earned 7 cents per share in the year-ago quarter.

For the quarter, net revenues were $809.3 million, up 31.7% from the prior-year period. The increase was driven by a solid performance of its Macau operations and a full-quarter contribution from its Encore property in Las Vegas.

However, the economic environment is still pressurizing the performance of its Las Vegas operations. Additionally, the bottom line also deteriorated in the quarter.

Including the impact of pre-opening costs, property charges and other non-cash non-operating income and expenses, the company has narrowed its loss. It reported a GAAP net loss of $5.2 million or 4 cents per share, compared to a net loss of $159.6 million or $1.49 per share in the year-ago quarter.

For full year 2009, the company reported a net income of $20.7 million or 17 cents per share, compared to a net income of $210.5 million or $1.92 per share in the year-ago quarter. Operating performance of the gaming sector was weak in 2009, as consumer spending remained under pressure due to weak employment and income trends.

Macau Operations

Net revenues at Macau were $508.4 million, up 29.6% year-over-year, primarily driven by a significant increase in table games turnover in the VIP segment which was $16.9 billion for the period, compared to $11.0 billion in the prior-year period.

However, the VIP table games win as a percentage of turnover for the quarter was 2.7%, at the low end of the expected range of 2.7% to 3.0% and below the 2.9% experienced in the prior-year quarter.

Average daily rate at Wynn Macau was $271, down marginally from $273 in the year-ago period. However, occupancy improved to 90.6% from 86.8% in the prior-year period, driving revenue per available room (RevPAR) to $246, up 3.6% from the 2008 levels of $237.

Las Vegas Operations

Wynn’s Las Vegas operations posted a 35.7% increase in revenue, primarily due to the full-quarter contribution of Encore, the company’s second property in Las Vegas that was opened in December 2008. However, due to a challenging economic environment, consumers continued to curb their gambling in the Las Vegas strip.

Casino revenues in Las Vegas were up 32.2% year-over-year to $120.0 million. Though table games drop increased to $548.5 million from $498.3 million, table games win percentage of 18.7% was below the expectations of 21% to 24%. The slot machine handle was down 10.6% year-over-year to $741.6 million, reflecting the fragility in the domestic business.

Non-casino revenues increased 30.9% from the prior-year period to $225.0 million, driven primarily by a 32.3% increase in hotel and food and beverage revenues from its Encore property.

Though hotel revenues were up as a result of the addition of 2,034 suites at Encore, we note that except for occupancy levels, both average daily rate and RevPAR were down in the quarter. The average daily room rate decreased to $219 from $281, while the occupancy level increased to 81.0% from 79.7% during the prior-year period. RevPAR decreased 20.6% year-over-year to $178.

The Quarter In Detail

Total operating expenses were $763.8 million, up 24.3% from the prior-year quarter. Capital expenditures, net of changes in construction payables and retention totaled approximately $100 million, primarily related to Encore at Wynn Macau.

Total cash balance on Dec 31, 2009, was $2.0 billion. Total debt outstanding at the end of the reported quarter was $3.6 billion, including approximately $2.5 billion of Wynn Las Vegas debt and $1.1 billion of Wynn Macau debt.

Last October, the company raised $1.8 billion via a Hong Kong listing of shares in Wynn Macau Ltd. During the reported quarter, the company also reduced its long-term borrowings by approximately $622 million, $144 million associated with Wynn Las Vegas facilities and $478 million in Macau.

The company has budgeted around $600 million for the construction of Encore at Wynn Macau. As of Dec. 31, 2009, the company incurred $454.9 million associated with the construction of this resort.

Additionally, this week, the company also announced its plan to open a casino on the Philadelphia waterfront. The company has already signed a letter of intent with Philadelphia Entertainment and Development Partners.

Shares of Wynn Resorts decreased 55 cents or 0.87% to $62.80 during Thursday’s regular trading on the New York Stock Exchange. The shares were down another 70 cents, or 1.11% in after-hours trading.

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Zacks Investment Research

Initiating Wynn Resorts as Neutral – Analyst Blog

Zacks Market Commentaries — Tue, 26 Jan 2010 22:08:43 +0000

We are initiating coverage on Wynn Resorts Ltd. (WYNN) with a Neutral recommendation. The company, along with its subsidiaries, is a leading developer, owner and operator of destination casino resorts with casino hotel resort properties in Las Vegas and Macau.

Wynn Resorts’ third quarter earnings of 33 cents per share were well ahead of the Zacks Consensus Estimate of 14 cents, primarily driven by a better-than-expected growth in the top line and improvements in the bottom line.

Wynn Resorts boasts a strong balance sheet in the gaming industry following its Hong Kong IPO in the second half of 2009. Net proceeds to the company as a result of this transaction were approximately $1.8 billion.

In order to expand its operations in Macau, Wynn Resorts is preparing to open a new resort -- Encore at Wynn Macau -- in the first half of this year. Macau, the only Chinese city where gambling is legal, has weathered the economic downturn quite well.

The company has paid a special cash dividend of $4.00 per share on its outstanding common stock in December 2009. Additionally, the Board of Directors also approved the commencement of a regular cash dividend program, beginning in 2010. The regular cash dividend is expected by the company to be 20 cents per common share for the first quarter of 2010.

On the downside, Wynn Resort’s domestic and international businesses continue to be negatively impacted by the prevailing economic conditions. The U.S. operations are the worst hit.

Wynn Resorts also faces unanticipated legislative risks from China. Given the company’s continuous growth in exposure to Macau, any unfavorable changes in visa restrictions will result in a slowdown in footfall to Macau.

Additionally, some of its competitors are also investing billions for expansion in Macau and Las Vegas. This could result in excess supply and reduce the company’s market share.

While we remain encouraged with the company’s strong brand name, healthy balance sheet and ability to execute in a difficult operating environment, we think a limited diversity remains one of its concerns. Additionally, the challenged economic factors will prohibit customers from gambling. Hence, we have assigned a Neutral recommendation on the shares.

Read the full analyst report on "WYNN"
Zacks Investment Research

Zacks Bull and Bear of the Day Highlights: Applied Materials, Jacobs Engineering Group Inc., MGM Mirage, Las Vegas Sands and Wynn Resorts – Press Releases

Zacks Market Commentaries — Tue, 19 Jan 2010 12:34:01 +0000

For Immediate Release

Chicago, IL – January 19, 2010 – Zacks Equity Research highlights Applied Materials (AMAT) as the Bull of the Day and Jacobs Engineering Group Inc. (JEC) the Bear of the Day. In addition, Zacks Equity Research provides analysis on MGM Mirage (MGM), Las Vegas Sands (LVS) and Wynn Resorts (WYNN).

Full analysis of all these stocks is available at http://at.zacks.com/?id=5506

Here is a synopsis of all five stocks:

Bull of the Day:

Applied Materials (AMAT) is one of the world's largest suppliers of fabrication equipment to semiconductor, LCD and solar PV cell manufacturers. Applied's leading market position, strength in China, improving trends across all served end markets, innovative R&D capabilities, management execution and solid financials makes us optimistic about the stock.

Although the solar business remains a drag on results, the situation may turn around in 2010. The nature of the company's business necessitates a huge cost structure and customer concentration, which should not be a problem in the current market environment.

Consequently, we are initiating coverage of AMAT shares with an Outperform rating.

Bear of the Day:

Jacobs Engineering Group Inc. (JEC) is one of the leading providers of professional, technical, and construction services to industrial, commercial and governmental clients. Jacobs' ongoing acquisition strategy will help it to strengthen its position in the future.

However, the very cyclical nature of its business, as well as its heavy dependence on third parties, is discouraging. The company also faces immense risks as it operates in a highly-competitive environment.

Thus, we maintain our Underperform rating on the stock.

MGM Mirage Plans Macau IPO – Analyst Blog

Zacks Market Commentaries — Mon, 18 Jan 2010 18:11:20 +0000

MGM Mirage (MGM) is marching ahead with its Hong Kong initial public offering (IPO) plan. According to the South China Morning Post, the company is planning to raise approximately $1 billion through the listing of its Macau property.

MGM Grand Macao, a joint venture between MGM Mirage and Pansy Ho, the daughter of Macau casino magnate Stanley Ho, is looking out for banks for this IPO.

Read the full analyst report on "MGM"
Read the full analyst report on "LVS"
Read the full analyst report on "WYNN"
Zacks Investment Research

BYI, VVUS, WEDC, DrStockPick.com Watch List! for Thursday Jan. 07, 2010, Bally Technologies, Inc., VIVUS, Inc. and White Electronic Designs Corp.

Dr. Stock Pick — Wed, 06 Jan 2010 23:46:00 +0000

_________________________________________ FREE Daily Stock Alerts From DrStockPick.com _________________________________________ DrStockPick.com Watch List! My Picks for Thursday Jan. 07, 2010 are: ************************************************************** BYI, Bally Technologies, Inc. BYI designs, manufactures, operates and distributes advanced gaming devices, systems and technology solutions worldwide. BYI reported an enterprise-wide contract with Galaxy Entertainment Group to provide a comprehensive table, slot, and casino management system for Galaxy in Macau. More about BYI [...]

Zacks Analyst Blog Highlights: Las Vegas Sands, Wynn Resorts, MGM Mirage, Gentiva Health Services Inc. and Amedisys Inc. – Press Releases

Zacks Market Commentaries — Tue, 22 Dec 2009 12:09:35 +0000

For Immediate Release

Chicago, IL – December 22, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Las Vegas Sands (LVS), Wynn Resorts (WYNN), MGM Mirage (MGM), Gentiva Health Services Inc. (GTIV) and Amedisys Inc. (AMED).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Monday’s Analyst Blog:

Sands’ Casino Projects on Track

The $5.5 billion Singapore casino project was initially scheduled to open by the fourth quarter of 2009. However, due to the lack of sand (for concrete) and workers, the project was rescheduled for a March opening. The cost of this project exceeded the initial estimate of around $3.2 billion. Adelson, however, mentioned that if the Singapore project gets delayed, it would only be for a couple weeks -- not months.

Sands’ plan is to construct 5 properties on Macau’s Cotai strip. Of the 5 projects, two are half-constructed. The company was compelled to halt its expansion projects in Macau last year due to financial constraints. However, the company raised $2.5 billion by listing publicly its Macau unit, Sands China, last month.

Adelson said that the projects would be completed within 5 years, depending on the pace of approvals obtained by the company from the government. Phase one of the two half-completed projects is expected to open by June 2011. The company will infuse around $500 million more in the project, sourcing it from funds raised from the Sands China initial public offering.

After the completion of the projects, the Cotai strip will have over 20,000 hotel rooms, meetings and convention space of over 1.6 million square feet, with retail malls spreading over 2 million square feet.

Sands, whose competitors include Wynn Resorts (WYNN) and MGM Mirage (MGM), is investing billions for expansion in Asia and especially in Macau. We believe that going forward, this robust development pipeline positions the company well in Asia’s casino market.

Gentiva Downgraded to Neutral

We are downgrading Gentiva Health Services Inc. (GTIV) to Neutral because of concerns related to the intense competition faced by the company’s products, the vulnerability of Gentiva to reimbursement risk and the inherent risks associated with the company’s growth-by-acquisition strategy.

Gentiva, founded in 1999 and headquartered in Atlanta, Georgia, provides home health services in the United States. It serves nearly 500,000 patients annually in more than 380 locations across 39 states. Gentiva provides various services to patients, including skilled nursing; physical, occupational, speech and neuro-rehabilitation therapy services; cardiac and pulmonary care; disease and pain management; respiratory services and home medical equipment (HME); infusion therapy and hospice services.

Even though we are pleased with the company’s wide range of products and broad customer base, the highly competitive industry in which the company operates is a concern. It competes with players like American Homepatient Inc., Amedisys Inc. (AMED) and Apria Healthcare Group Inc.

The company is highly vulnerable to reimbursement risk given that Medicare is the largest single purchaser of services. In fiscal 2008, approximately 66% of Gentiva’s total net revenues were generated from Medicare, Medicaid and local government programs.

Gentiva has successfully grown through acquisitions. During the past few years, the company has completed multiple acquisitions, whose aggregate annualized revenues were in excess of $360 million. However, the growth-by-acquisition strategy adopted by the company has inherent risks.

Our price target of $28 is based on 13.3x our 2009 earnings estimate of $2.11.

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Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517

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Zacks Investment Research

Zacks Analyst Blog Highlights: Las Vegas Sands, Wynn Resorts, MGM Mirage, Gentiva Health Services Inc. and Amedisys Inc. – Press Releases

Zacks Market Commentaries — Tue, 22 Dec 2009 12:09:35 +0000

For Immediate Release

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Monday’s Analyst Blog:

Sands’ Casino Projects on Track

Gentiva Downgraded to Neutral

Our price target of $28 is based on 13.3x our 2009 earnings estimate of $2.11.

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About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517

About Zacks

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

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Contact:
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312-265-9380
Visit: www.zacks.com

Zacks Investment Research

Sands’ Casino Projects on Track – Analyst Blog

Zacks Market Commentaries — Mon, 21 Dec 2009 20:38:09 +0000

Las Vegas Sands’ (LVS) expansion projects are right on track. Sands’ Chief Executive Officer, Sheldon Adelson, expects to complete its Macau casino expansion projects within a period of 5 years. Its Singapore casino resort project should open by the end of March 2010.

The $5.5 billion Singapore casino project was initially scheduled to open by the fourth quarter of 2009. However, due to the lack of sand (for concrete) and workers, the project was rescheduled for a March opening. The cost of this project exceeded the initial estimate of around $3.2 billion. Adelson, however, mentioned that if the Singapore project gets delayed, it would only be for a couple weeks -- not months.

Sands’ plan is to construct 5 properties on Macau’s Cotai strip. Of the 5 projects, two are half-constructed. The company was compelled to halt its expansion projects in Macau last year due to financial constraints. However, the company raised $2.5 billion by listing publicly its Macau unit, Sands China, last month.

Adelson said that the projects would be completed within 5 years, depending on the pace of approvals obtained by the company from the government. Phase one of the two half-completed projects is expected to open by June 2011. The company will infuse around $500 million more in the project, sourcing it from funds raised from the Sands China initial public offering.

After the completion of the projects, the Cotai strip will have over 20,000 hotel rooms, meetings and convention space of over 1.6 million square feet, with retail malls spreading over 2 million square feet.

Sands, whose competitors include Wynn Resorts (WYNN) and MGM Mirage (MGM), is investing billions for expansion in Asia and especially in Macau. We believe that going forward, this robust development pipeline positions the company well in Asia’s casino market.
Read the full analyst report on "LVS"
Read the full analyst report on "WYNN"
Read the full analyst report on "MGM"
Zacks Investment Research

A New Record for Infrastructure

Frank Holmes — Thu, 17 Dec 2009 06:00:00 +0000

China wants to set a new record with an infrastructure project that would also link three of the nationrsquo;s economic engines. Work began this week on what will be the worldrsquo;s longest sea bridge to physically connect, and strengthen the economic ties between, mainland China and the thriving former colonies of Hong Kong and Macau. The ambitious $10 billion project includes man-made islands, a 3-mile subsea tunnel and a 23.6 mile bridge. It is scheduled to be finished in 2016. The exploding gaming industry in Macau (under Portugalrsquo;s control until 1999) has made it the Las Vegas of the East ndash; its GDP has tripled in the past decade. Hong Kong (a British colony until 1997) has long been the regionrsquo;s financial center and the Pearl River Delta is a sprawling manufacturing hub. The Delta region accounts for 40 percent of Chinarsquo;s GDP, but it has struggled during the global recession. Once completed, the bridge will provide Delta businesses with easier access to higher-end consumers in Hong Kong and Macau. Some trips that now take three hours would be trimmed to a mere 30 minutes. According to Reuters, Hong Kong officials estimate the bridge should generate $6.6 billion in economic benefits within the first two decades of use. All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor.

A New Record for InfrastructureA New Record for Infrastructure

Frank Holmes — Thu, 17 Dec 2009 06:00:00 +0000

Moody’s Confirms Sands Ratings – Analyst Blog

Zacks Market Commentaries — Wed, 02 Dec 2009 20:39:15 +0000

Yesterday, Las Vegas Sands Corporation’s (LVS) ratings were confirmed by Moody's Investors Service (MCO). Las Vegas Sands’ "B3" junk corporate family rating, probability of default rating and long-term debt ratings were confirmed by the rating agency. Its speculative-grade liquidity rating was raised to "SGL-2" from "SGL-3." However, the rating agency has assigned a negative outlook on the company.

The confirmation of ratings and the upgrade primarily reflect the company’s improved position in terms of liquidity and debt position. The company has recently made a $2.5 billion public offering through its subsidiary Sands China Ltd.

Las Vegas Sands has also converted $600 million of exchangeable bonds into equity. Other positive factors include the repayment of $500 million of debt for its Macau subsidiary and amendments to the credit facility for its unit in the Chinese gambling enclave.

The rating agency also assigned an improved outlook for the company's Macau subsidiary. Macau, the only Chinese city where gambling is legal, has generated HK$105.6 billion ($13.5 billion) of gross gaming revenue in 2008. This more than doubled the revenue generated by the Las Vegas strip.

Friendly gaming policies from the local government, limited supply of new gaming tables in the near term and slackening of visa restrictions by Beijing to allow mainland tourists to visit Macau once a month rather than twice a year should add to the company’s revenue stream, according to the rating agency.

However, on the negative side, Moody’s expects the gaming market in the Las Vegas strip to worsen. Also, the ramp-up of the company's property in Bethlehem, PA is expected to be slower than predicted.

Moreover, the rating agency expects the expansion in Macau to be more debt-financed. Additionally, there exists development and ramp-up risks for the $5.5 billion casino project in Singapore, scheduled to open in the first quarter of 2010.
Read the full analyst report on "LVS"
Read the full analyst report on "MCO"
Zacks Investment Research

Las Vegas Sands Raises $5B – Analyst Blog

Zacks Market Commentaries — Mon, 30 Nov 2009 15:51:00 +0000

Las Vegas Sands (LVS) has raised about $5 billion of capital through debt and equity financing to restart its Macau casino expansion projects that it had been compelled to close down last year due to financial constraints.

Las Vegas Sands’ Macau unit, Sands China Ltd. was listed on the Hong Kong stock exchange after the completion of an initial public offering (IPO) early Monday. The company raised $3.1 billion from this offering. This included $2.5 billion from listing and $600 million raised in a pre-IPO exchangeable bond financing transaction completed in September.

The company has also secured $1.75 billion in project financing. This together with $500 million in proceeds from the Sand China IPO will be used to restart and complete its 6,000-room casino project on the Cotai Strip in Macau, which will feature Shangri-La, Traders and Sheraton hotel brands.

Macau is the only Chinese city where gambling is legal. It has become an attractive destination for casino companies such as Las Vegas Sands, Wynn Resorts (WYNN) and MGM Mirage (MGM), who are investing billions for expansion on this island. Macau has survived the economic downturn relatively well.

Macau has generated HK$105.6 billion ($13.5 billion) of gross gaming revenue in 2008 -- more than double the revenue generated by the Las Vegas strip. Also, visa restrictions have recently been slackened by Beijing to allow mainland tourists to visit Macau once a month rather than twice a year.

The capital bolstering initiatives augur well for Las Vegas Sands, which has a robust development pipeline, with projects in Macau, Las Vegas, Singapore and Pennsylvania.
Read the full analyst report on "LVS"
Read the full analyst report on "WYNN"
Read the full analyst report on "MGM"
Zacks Investment Research

Zacks Analyst Blog Highlights: Las Vegas Sands, Citigroup, Goldman Sachs, Barclays PLC and UBS AG – Press Releases

Zacks Market Commentaries — Tue, 24 Nov 2009 12:16:19 +0000

For Immediate Release

Chicago, IL – November 24, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Las Vegas Sands (LVS), Citigroup (C), Goldman Sachs (GS), Barclays PLC (BCS) and UBS AG (UBS).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Monday’s Analyst Blog:

Sands China Raises $2.5B in IPO

The proceeds from this offering, combined with $1.75 billion in bank financing, would aid Sands China to restart its Macau's Cotai Strip construction projects. Last year, the company was forced to halt its casino expansion projects in Macau due to financial constraints, at which time it laid off 11,000 workers.

The IPO is being handled by five investment banks. Citigroup (C) and Goldman Sachs (GS) are the joint global coordinators for the offer while Barclays PLC (BCS), BNP Paribas SA and UBS AG (UBS) are the underwriters.

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Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517

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Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

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Zacks Investment Research

Sands China Raises $2.5B in IPO – Analyst Blog

Zacks Market Commentaries — Mon, 23 Nov 2009 21:57:51 +0000

Las Vegas Sands (LVS) Macau unit, Sand China raised $2.5 billion through its Hong Kong initial public offering (IPO). The company has priced the IPO for 1.87 billion shares at HK$10.38 per share, the low end of the expected HK$10.38-HK$13.88 range.

The proceeds from this offering, combined with $1.75 billion in bank financing, would aid Sands China to restart its Macau's Cotai Strip construction projects. Last year, the company was forced to halt its casino expansion projects in Macau due to financial constraints, at which time it laid off 11,000 workers.

The IPO is being handled by five investment banks. Citigroup (C) and Goldman Sachs (GS) are the joint global coordinators for the offer while Barclays PLC (BCS), BNP Paribas SA and UBS AG (UBS) are the underwriters.

Earlier, in October, rival company Wynn Resorts (WYNN) had held its IPO for its Macau assets. Wynn Macau has experienced a strong debut in the Hong Kong stock exchange. Wynn sold 1.25 billion shares or a 25% stake in its Macau business. However, the shares of Wynn Macau are now trading at a discount to the offering price.

Macau is the only Chinese city where gambling is legal. It has become an attractive destination for casino companies such as Las Vegas Sands, Wynn Resorts and MGM Mirage (MGM), which are investing billions for expansion on this island. Macau has survived the economic downturn relatively well.

Macau has generated HK$105.6 billion ($13.5 billion) of gross gaming revenue in 2008, more than double the revenue generated by the Las Vegas strip. Also, visa restrictions had recently been slackened by Beijing to allow mainland tourists to visit Macau once a month rather than twice a year.

The capital bolstering initiatives augur well for Las Vegas Sands, which has a robust development pipeline, with projects in Macau, Las Vegas, Singapore and Pennsylvania.
Read the full analyst report on "LVS"
Read the full analyst report on "MGM"
Read the full analyst report on "WYNN"
Read the full analyst report on "C"
Read the full analyst report on "GS"
Read the full analyst report on "BCS"
Read the full analyst report on "UBS"
Zacks Investment Research

Giordano Revenues Down 12.6% In First Three Quarters Of 2009

China Retail News — Mon, 23 Nov 2009 19:30:35 +0000

Hong Kong apparel retailer Giordano has published its financial results to September 30, 2009. According to the report, its overall revenues decreased by 9.6% year-on-year in the third quarter of 2009 and its revenues from retail and distribution department decreased by 6.9% year-on-year. During the period, Giordano's retail and distribution revenue in Hong Kong and Macau [...]

Wynn Surpasses Expectations – Analyst Blog

Zacks Market Commentaries — Tue, 27 Oct 2009 17:45:27 +0000

Wynn Resorts Limited (WYNN) today reported third-quarter earnings of 28 cents per share. Adjusted earnings were 33 cents. The results are ahead of the Zacks Consensus Estimate of 14 cents. The company had earned 49 cents (adjusted earnings of 62 cents) in the year-ago quarter.

Net revenues were $773.1 million compared to $769.2 million in the prior-year period. Results were driven by the opening of Encore at Wynn Las Vegas in Dec. 2008. However, due to a challenging economic environment, consumers continued to curb their gambling.

Casino revenues in Las Vegas were flat year-over-year, while non-casino revenues increased 18% from the prior-year period, driven primarily by higher hotel and food and beverage revenues from Encore.

Though hotel revenues were up as a result of the addition of 2,034 suites at Encore, we note that average daily rate, occupancy levels and revenue per available room (RevPAR) were all down in the quarter.

Average daily room rate decreased to $210 from $272, while occupancy fell to 83.9% from 96.1% during the prior year period. As a result, RevPAR decreased 32.6% year-over-year to $176.

Net revenues at Macau were $448.5 million, down 5.5% year-over-year due to the drop in table games turnover in both the VIP and mass market segments.

Average daily rate at Wynn Macau was $263, down from $272 in the year-ago period. Occupancy improved to 89.2% from 86.2% during the prior-year period. RevPAR was $235, slightly above 2008 levels of $234.

Wynn Macau raised $1.63 billion earlier in October with an initial public offering on the Hong Kong Stock Exchange.

Wynn Encore Macau, the company’s second resort in Macau, is scheduled to open in the first half of 2010. The company has budgeted around $650 million for the construction of this resort. As of Sept. 30, 2009, the company incurred $375.6 million associated with the construction of Encore at Wynn Macau.

Total cash balance on Sept. 30, 2009, was $1.3 billion. Total debt outstanding at the end of the quarter was $4.2 billion, including approximately $2.7 billion of Wynn Las Vegas debt and $1.5 billion of Wynn Macau debt.

While we remain encouraged with Wynn’s strong brand name, balance sheet and its ability to execute in a difficult operating environment, we think the company's limited diversity remains one of its key short-term risks. Also, the challenged economic factors will compel customers to gamble less.
Read the full analyst report on "WYNN"
Zacks Investment Research

Avnet Expands in China – Analyst Blog

Zacks Market Commentaries — Mon, 19 Oct 2009 21:35:40 +0000

Avnet, Inc. (AVT) recently announced that it has acquired a controlling interest in Vanda Group from Hutchinson Whampoa Limited in a strategic move to expand its presence and customer base across China. Vanda Group will operate as an Avnet company while maintaining its current operations, management team and the Vanda brand.

Vanda Group is a leading IT solutions and services provider covering major cities in China, Hong Kong and Macau, and has been around 27 years. Vanda Group provides systems integration services and solutions incorporating hardware and software from major suppliers including IBM (IBM), Lenovo, Cisco (CSCO), Sun (JAVA), Nokia (NOK) and Oracle (ORCL). The company serves clients from diverse industries including major banks, financial institutions, telecommunications companies, utilities and government departments. Vanda Group generated revenues of approximately $50 million in 2008 and employs more than 600 people.

The transaction will also provide the Technology Group at Avnet with a strong foothold in the banking and financial sector, where Vanda’s flagship product, VisionBanking Suite, is a well-known solution.

Avnet earlier entered into a distribution agreement with India-based MosChip Semiconductor Technology Ltd with a view to expand arms in the emerging markets of Asia. MosChip provides high performance multimedia and connectivity solutions for consumer, industrial and computing applications. Avnet is one of the world’s largest distributors of electronic components and computer products.

With the economy showing signs of improvement, both Avnet and its rival Arrow Electronics (ARW) are on the lookout for strategic fits to their business models. Management had earlier stated that growth in Asia continues to offset sales decline in other regions.

Earlier, Avnet reported weak fourth-quarter results, as its top line remained challenged by adverse business conditions amid the global economic slowdown. The company’s organic growth continues to be lackluster and it continues to expand only through acquisitions.
Read the full analyst report on "AVT"
Read the full analyst report on "IBM"
Read the full analyst report on "CSCO"
Read the full analyst report on "JAVA"
Read the full analyst report on "NOK"
Read the full analyst report on "ORCL"
Read the full analyst report on "ARW"
Zacks Investment Research

LVS Plans Hong Kong IPO – Analyst Blog

Zacks Market Commentaries — Mon, 19 Oct 2009 18:27:38 +0000

Las Vegas Sands Corporation (LVS) is planning for a Hong Kong initial public offering (IPO) for its Macau assets next month. The company intends to raise up to $2.5 billion through the IPO. The offering is intended to complete in about four weeks after receiving regulatory approval for offering and listing.

In September, Las Vegas announced the infusion of up to $600 million of capital through the sale of exchangeable bonds to strengthen up its balance sheet. The bonds will be compulsorily exchanged into common stock of its Macau unit after the unit's pending IPO on the Hong Kong Stock Exchange.

Rival company Wynn Resorts (WYNN) held its IPO for its Macau assets earlier in October. Wynn Macau has experienced a strong debut in the Hong Kong stock exchange. Wynn sold 1.25 billion shares or a 25% stake in its Macau business, which represented Hong Kong's second-biggest IPO of the year.

Other rivals -- MGM Mirage (MGM) and its Macau, China, casino partner, businesswoman/tycoon Pansy Ho -- are also planning to expand their casino operations in Macau and are contemplating an IPO as well.

Macau has become an attractive destination for casino companies such as Las Vegas Sands, Wynn Resorts and MGM, who are investing billions for expansion on this island. Macau has survived the economic downturn relatively well. It has generated HK$105.6 billion ($13.5 billion) of gross gaming revenue in 2008, more than double the revenue generated by the Las Vegas strip. Also, visa restrictions had recently been lessened by Beijing to allow mainland tourists to visit Macau once a month rather than twice a year.

However, recently, government officials of Macau met with six major casino operators and concluded that limitless expansion of the Macau gambling sector may be harmful to the society. Significant expansion of the gambling business in Macau has encouraged corruption, addiction and prostitution in that area.

The government is considering regulations like raising the entry age limit for casinos to 21 years from 18 years, limiting the number of tables per casino and modifying zoning laws to compel slot machine halls away from residential areas and into commercial zones.

We think that such regulations will pose a threat to casino operators in Macau, though oversupply may be limited in the region. Pending further development, we continue to hold a Neutral recommendation on the shares of Las Vegas Sands, Wynn Resorts and MGM Mirage.
Read the full analyst report on "LVS"
Read the full analyst report on "WYNN"
Read the full analyst report on "MGM"
Zacks Investment Research

Positive Outlook for Wynn Resorts – Analyst Blog

Zacks Market Commentaries — Wed, 14 Oct 2009 20:12:42 +0000

On Monday, Fitch Ratings raised its outlook for Wynn Resorts Ltd. (WYNN) to positive from stable subsequent to the completion of the company’s Hong Kong initial public offering (IPO) for its Macau unit. The ratings also include an improved operating outlook following the relaxation of travel restrictions.

Through the Hong Kong IPO, Wynn sold 1.25 billion shares or a 25% stake in its Macau business, which represented Hong Kong's second-biggest haul of the year.

Macau, a former Portuguese colony, is one of the world’s biggest gambling markets. Though the economic slowdown has negatively impacted the revenues of casino operators in the last few quarters, we note that Macau has been posting record revenues. Recently, visa restrictions had been lessened by Beijing to allow mainland tourists to visit Macau once a month rather than twice a year.

In 2008, Macau generated HK$105.6 billion ($13.5 billion) of gross gaming revenue. This was more than double the revenue generated by the Las Vegas Strip during the same period. Wynn’s rival company, Las Vegas Sands (LVS), is also planning an IPO of its Macau assets in late November or early December.

Wynn Encore Macau, the company’s second resort in Macau, is scheduled to open in the first half of 2010. The company has budgeted around $650 million for the construction of this resort and so far has incurred about half of that construction cost.

While we remain encouraged with Wynn’s ability to execute in a difficult operating environment, its brand name and strong balance sheet with lower debt levels, we think the company's limited diversity remains one of its key short-term risks.

Additionally, the Macau authorities are considering regulations to increase the entry age limit and limiting the gaming tables. Though such regulations will dampen the growth of the casino industry in the region, we believe that the easing of visa restrictions will make up for the loss of revenue.
Read the full analyst report on "WYNN"
Read the full analyst report on "LVS"
Zacks Investment Research

Zacks Analyst Blog Highlights: Las Vegas Sands, Wynn Resorts Ltd., MGM Mirage, Advance Auto Parts and O’Reilly Automotive – Press Releases

Zacks Market Commentaries — Wed, 14 Oct 2009 12:11:32 +0000

For Immediate Release

Chicago, IL – October 14, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Las Vegas Sands (LVS), Wynn Resorts Ltd. (WYNN), MGM Mirage (MGM), Advance Auto Parts (AAP) and O’Reilly Automotive (ORLY).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Tuesday’s Analyst Blog:

Macau Casino Growth Threatened?

Yesterday, government officials of Macau met with six major casino operators including Las Vegas Sands (LVS) and Wynn Resorts Ltd. (WYNN) and a casino jointly operated by MGM Mirage (MGM) and local businesswoman/tycoon Pansy Ho, concluding that limitless expansion of the Macau gambling sector may be harmful to the society. Significant expansion of the gambling business in Macau has encouraged corruption, addiction and prostitution in that area.

The government is considering regulations like raising the entry age limit for casinos to 21 years from 18 years, limiting the number of tables per casino and modifying zoning laws to compel slot machine halls away from residential areas and into commercial zones.

Advance Auto Targets E-Commerce

Advance Auto Parts (AAP) has launched its own e-commerce website, AdvanceAutoParts.com, to sell its products online for the first time since its dissolution with Phoenix-based auto retailer CSK Auto during the first quarter of 2009. The website will allow customers to purchase more than 100,000 parts and accessories. It will also allow free shipping on purchases of $75 or more as well as free in-store pickup.

The Roanoke, VA-based auto retailer previously operated a similar website called PartsAmerica.com in partnership with CSK Auto. However, it had to close down the website after CSK was acquired by Springfield, MO-based auto retailer O’Reilly Automotive (ORLY). At that time, Advance Auto only operated an online merchandise lookup feature.

In 2007, Advance Auto targeted e-commerce as a potential growth channel. The company now aims to take it to the next level. Last month, the company opened an e-commerce office in Campbell, CA, near Silicon Valley. The headcount in the office (currently constituting 20 employees) will be doubled as the company ramps up the new website.

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About Zacks Equity Research

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Zacks Investment Research

Macau Casino Growth Threatened? – Analyst Blog

Zacks Market Commentaries — Tue, 13 Oct 2009 14:22:53 +0000

The explosive growth of the casino industry in Macau may be threatened as the government of Macau − the Chinese gambling Mecca − is considering ways to impose restrictions on age, number of tables and locations of casinos.

Yesterday, government officials of Macau met with six major casino operators including Las Vegas Sands (LVS) and Wynn Resorts Ltd. (WYNN) and a casino jointly operated by MGM Mirage (MGM) and local businesswoman/tycoon Pansy Ho, concluding that limitless expansion of the Macau gambling sector may be harmful to the society. Significant expansion of the gambling business in Macau has encouraged corruption, addiction and prostitution in that area.

The government is considering regulations like raising the entry age limit for casinos to 21 years from 18 years, limiting the number of tables per casino and modifying zoning laws to compel slot machine halls away from residential areas and into commercial zones.

Macau has become an attractive destination for the casino companies such as Las Vegas Sands, Wynn Resorts and MGM, who are investing billions for expansion on this island. Macau has survived the economic downturn relatively well. It has generated HK$105.6 billion ($13.5 billion) of gross gaming revenue in 2008, more than double the revenue generated by the Las Vegas strip. Also, visa restrictions had recently been lessened by Beijing to allow mainland tourists to visit Macau once a month rather than twice a year.

Last week, Wynn Macau has experienced a strong debut in the Hong Kong stock exchange. Wynn sold 1.25 billion shares or a 25% stake in its Macau business, which represented the Hong Kong's second-biggest IPO of the year. Las Vegas Sands is also planning an IPO of its Macau assets in late November or early December.

We think that such regulations will pose a threat to casino operators in Macau , though oversupply may be limited in the region. Pending further development, we continue to hold a Neutral recommendation on the shares of Las Vegas Sands, Wynn Resorts and MGM Mirage.
Read the full analyst report on "LVS"
Read the full analyst report on "MGM"
Read the full analyst report on "WYNN"
Zacks Investment Research

Company News for October 13, 2009 – Corporate Summary

Zacks Market Commentaries — Tue, 13 Oct 2009 14:22:41 +0000

• Johnson & Johnson (NYSE:JNJ) beat estimates with third quarter earnings of $1.20 a share, seven cents better than expected on revenues of $15.08 billion, below estimates of $15.22 billion. The company said it now sees 2009 earnings of $4.54 to $4.59 a share, compared with its previous guidance of $4.45 to $4.55 a share

• UBS (NYSE:UBS) initiated coverage of VF Corp (NYSE:VFC) with a "buy" rating

• Pier 1 Imports (NYSE:PIR) reported a 9.9% gain in September same-store-sales, versus last year's 11.7% decline. The company expects inventory levels will peak at the end of the quarter at about $350 million

• According to the WSJ, Macau may draft rules within the next two months to impose age and table limits on casinos there

• AIG International (NYSE:AIG) agreed to sell its Taiwan life insurance unit to a Hong Kong investment group for $2.15 billion

Zacks Investment Research

Casinos Returning to Blue Chip Status

Investment U — Wed, 23 Sep 2009 15:30:58 +0000

Casinos Returning to Blue Chip Status It’s been no secret that we’ve been bullish on the casino sector for some time. From Doubling down on Casinos and Bank Pullback Exposes Casino Opportunities in April, there has been a lot of potential. Last week we asked if the casino sector had gotten too hot. And [...]

Wynn Plans IPO for Macau Unit – Analyst Blog

Zacks Market Commentaries — Tue, 22 Sep 2009 18:40:54 +0000

Wynn Resorts (WYNN) is planning to raise up to $1.6 billion in its Hong Kong initial public offering (IPO) for its Macau unit, which represents an increase from $1.0 billion as previously intended.

Wynn intends to offer 1.25 billion shares, representing 25% of the equity in the company's Macau operations. The price range of the offer is HK$8.52–$10.08 per share or US $1.10–$1.30. JP Morgan (JPM), UBS AG (UBS) and Morgan Stanley have been chosen to handle this Hong Kong listing.

Wynn Encore Macau, the company’s second resort in Macau, is scheduled to open in the first half of 2010. The company has budgeted around $650 million for the construction of this resort and so far has incurred about half of that construction cost.

Las Vegas Sands (LVS), Wynn’s rival, is also planning an IPO of its Macau assets in late November or early December.

Macau, a former Portuguese colony, is one of the world’s biggest gambling markets. Though the economic slowdown has negatively impacted the revenues of the casino operators in the last few quarters as fewer gamblers visited the casinos, we note that Macau has posted record revenues in August. Hence with the recent rebound in the economy and with indications that the visa restrictions on mainland Chinese visitors may lift, we think that the Hong Kong offering will strengthen the company’s earnings going forward.

While we remain encouraged with Wynn’s ability to execute in a difficult operating environment, its brand name and strong balance sheet with lower debt levels, we think that the company's limited diversity remains one of its key short-term risks.
Read the full analyst report on "WYNN"
Read the full analyst report on "LVS"
Read the full analyst report on "GS"
Read the full analyst report on "UBS"
Zacks Investment Research

Company News for September 21, 2009 – Corporate Summary

Zacks Market Commentaries — Mon, 21 Sep 2009 14:45:02 +0000

• Dell (NASDAQ:DELL) revealed plans to acquire Perot Systems (NYSE:PER) –founded my former U.S. Presidential candidate, Henry Ross Perot- for about $3.9 billion, or $30 per share in efforts to expand beyond its core computer business to include computer-services consulting.

• Wynn Resorts (NASDAQ:WYNN) has responded to positive reactions to its plans for an initial public offering in Hong Kong of its Macau casino operations, increasing the size of proceeds to about $1.6 billion from $1 billion of a few weeks earlier.

• Credit Suisse (NYSE:CS) lifted its rating on Novellus Systems (NASDAQ:NVLS) to "outperform" from "neutral" with a price target of $29, up from $23.

• Lennar Corp (NYSE:LEN) reported a 3rd quarter loss of 97 cents, including 76 cents in charges, versus estimates of a $0.48 cent loss, compared with a 56 cent loss last year.

• Synnex Corp (NYSE:SNX) is scheduled to report earnings today, with an earnings consensus estimate of $0.61, respectively, compared with $0.66 the same quarter last year. Research in Motion (NASDAQ:RIMM) results are also anticipated.
Zacks Investment Research

Cash Infusion by Las Vegas Sands – Analyst Blog

Zacks Market Commentaries — Fri, 04 Sep 2009 18:20:13 +0000

Las Vegas Sands Corporation (LVS) has announced its intention to infuse up to $600 million of capital through the sale of exchangeable bonds to strengthen up its balance sheet prior to the scheduled Hong Kong initial public offering (IPO) of its subsidiary.

The bonds will be compulsorily exchanged into common stock of its Macau unit after the unit's pending IPO on the Hong Kong Stock Exchange. The bonds will mature on September 4, 2014, according to a filing with the Securities and Exchange Commission, for which Goldman Sachs (GS) is the banker.

This pre-IPO financing is a part of Las Vegas Sands' current efforts to strengthen its financial position. Recently, the company has amended its $3.3 billion Macau credit facility. The amended agreement would enable it to sell a minority interest in its Macau operations for bolstering cash. Senior secured or unsecured notes can also be issued by Las Vegas Sands in Macau.

Las Vegas Sands is creating the Cotai Strip, a master-planned development of resort-casino properties in Macau. The project will feature approximately 21,000 rooms from renowned hotel brands such as St. Regis, Sheraton, Shangri-La, Traders, Hilton, Conrad, Fairmont, Raffles, Holiday Inn and InterContinental.

Las Vegas Sands maintains a robust development pipeline, with projects in Macau, Las Vegas, Singapore and Pennsylvania. In fact, the company is exposed to Las Vegas and Macau, two of the most dynamic gaming markets in the world. Additionally, these capital bolstering initiatives coupled with cost-containment measures augur well going forward.
Read the full analyst report on "LVS"
Read the full analyst report on "GS"
Zacks Investment Research

The Top 10 Reasons Why the China Sell Off Will Continue

Investment U — Tue, 01 Sep 2009 20:48:17 +0000

The Top 10 Reasons Why the China Sell Off Will Continue by Louis Basenese, Advisory Panelist How much are you willing to pay for good advice? And by “good,” I mean profitable. A couple of hundred bucks? A couple of thousand? Before you answer, consider this: Two weeks ago, I alerted members of The Oxford Club [...]

MGM Mirage (NYSE:MGM): Downgraded to Neutral at Merrill Lynch

Notable Calls — Wed, 29 Jul 2009 12:33:00 +0000

div style="text-align: justify;"Merrill Lynch is out downgrading span style="font-weight: bold;"MGM Mirage (NYSE:MGM)/span to Neutral from Buy while lowering their target to $8 (prev. $11).br /br /MGM has taken an increasingly aggressive strategy toward booking group business in late 2009, ’10 and ’11. While this helps to fill MGM’s huge 33.7K room inventory, it effectively locks in lower rates, meaning MGM’s earnings snap-back could be delayed. No signs of group volume recovery by the hotel companies, means pricing will remain challenged for at least the rest of ’09 and likely longer.br /br /span style="font-weight: bold;"Supply picture may not be improving as quickly as thought/spanbr /Merrill continues to believe supply risks from CityCenter cannibalization (6K rooms, +6% growth) are understood, but the Fontainebleau LV (4K rooms, +4% growth) bankruptcy in June and slow progress on Cosmopolitan (3 rooms, +3% growth) were incremental positives. Now, there are signs that Fontainebleau LV could be worked out and Cosmopolitan (appt’d a new CEO) could open late ‘10, meaning supply of an add’l 7K high end rooms (+7% growth) will continue into late ‘10/’11.br /br /span style="font-weight: bold;"Credit separation from equity a bad signal/spanbr /In the last run, MGM’s debt and equity moved in lock step, as reduced likelihood of bankruptcy was positive for both. This hasn’t been the case recently w/equity rallying 36% (vs. Samp;P 11%) but LT debt (Jan 17 7 5/8) narrowing slightly from 64.5 to 66.25. With $12B in debt and a quick profit snap-back in ’10/’11 less likely due to locked-in rates + supply, add’l dilution for equity holders is a continued risk.br /br /span style="color: rgb(255, 0, 0);"Notablecalls:/span The call has some new info (negative) and will likely work. You can get some decent fills in the pre market and cover lower later in the day.br /br /MGM does not have any Macau assets to monetize so it's pretty much dying a slow death.br /br /Right now I'm interested if it can go sub-$7 or not. With a little help from the market I think it can./divdiv class="blogger-post-footer"img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/29297569-3750204165294699051?l=notablecalls.blogspot.com'//div

Sino Payments, Inc. (SNPY.OB) Sets Focus on Hong Kong Market with Signing of Partnership Memorandum of Understanding

QualityStocks — Wed, 08 Jul 2009 14:32:00 +0000

Sino Payments, Inc., a company providing IP credit and debit card processing services to large retail chains in China and throughout Asia, announced that it has signed a Memorandum of Understanding with Wincor-Nixdorf to provide the Sino Payments IP card processing system to retail chain, supermarket, and other retail customers initially in the Hong Kong [...]

Time to Bet on Casinos… Again

Investment U — Tue, 16 Jun 2009 13:56:30 +0000

Time to Bet on Casinos… Again by The Investment U Research Team Almost two months ago we wrote two articles on the valuations in Casino stocks MGM Mirage (NYSE: MGM) Las Vegas Sands (NYSE: LVS) and Wynn Resorts (Nasdaq: WYNN). Since then, prices have more than doubled and subsequently pulled back. Their stock prices are [...]

The Invisible Plague

Contrarian Profits — Mon, 15 Jun 2009 16:14:51 +0000

pMake more than 300% when the world wakes up sick come winter. There is a myth in this biz that “if it bleeds, it leads.” The idea is that what truly makes mainstream media moguls happy is guts, gore and conflict. Drama sells, and sells well. Death, war and sex sell even better./p pIt’s commonly held that when Frederick Remington cavilled to William Randolph Hearst that conditions in Cuba were not bad enough to warrant hostilities, Hearst told Remington to shut up and draw: em“You furnish the pictures and I#8217;ll furnish the war.”/em/p pThe truth is, as always, somewhat more complex. Yes, a good tale of death and destruction will hold the public’s interest for a while. But it has to be#8230;/p

Sino Payments, Inc. (SNPY.OB) Enters $18.6 Trillion Asia Card Processing Market

QualityStocks — Wed, 10 Jun 2009 12:39:27 +0000

Sino Payments, Inc., a provider of IP credit and debit card processing services to large retail chains in China and throughout Asia, including supermarket chains and large regional multinational retailers, recently announced that the company is deploying its proprietary SinoPay Global Processing Platform (GPP) in Shanghai and Macau to service Asian regional retailers. SinoPay GPP [...]

Will the Las Vegas Comeback Continue?

Contrarian Profits — Fri, 29 May 2009 19:54:12 +0000

pSince the markets found a short-term bottom in March, we’ve witness the meteoric rise of many beaten-down small-caps. And of all the names and sectors that rebounded this spring, none was more impressive than the resort and casino stocks./p pstrongLas Vegas Sands (a href="http://www.google.com/finance?q=lvs" target="_blank"NYSE: LVS/a)/strong and strongMGM Mirage (a href="http://www.google.com/finance?q=mgm" target="_blank"NYSE: MGM/a)/strong rocketed to triple-digit gains in just a few short weeks./p p style="text-align: center;"/p pLas Vegas Sands, the owner of the popular Venetian Hotel in Las Vegas, found its stock absolutely gutted in 2008, dropping from well above $100 per share down to single-digits. Investors fretted over the company’s massive debt, and concerns regarding Las Vegas’ “recession proof” economy hitting the skids. But shortly after LVS shares fell to $1.38, a comeback was in the works…/p pAs you can see#8230;/p

Bank Pullback Exposes Casino Opportunities

Investment U — Mon, 20 Apr 2009 19:59:15 +0000

Bank Pullback Exposes Casino Opportunities by The Investment U Research Team This morning we received news from the leading economic indicators that our recovery might be farther off than expected. Additionally, Bank of America’s (NYSE: BAC) report sent a shiver down Wall Street’s spine. They warned that credit markets were continuing to deteriorate. Now there’s [...]

LVS to Restart Macau Project – Zacks Tale of the Tape

Zacks Market Commentaries — Thu, 02 Apr 2009 16:46:45 +0000

Las Vegas Sands Corp. (LVS) announced today that it plans to restart resort construction in Macau (China) later this year.

The casino giant, which is struggling amid a worsening recession, is negotiating with potential investors about resuming work at the Cotai strip in Macau.

"We are certainly looking to resume in this calendar year, keeping in mind that when we suspended these works, we were only about nine months off from opening the first phase," said the company's Asia President Stephen Weaver.

LVS suspended the casino expansion at Macau in late 2008 and downsized almost 11,000 workers engaged in the Cotai strip.

Analysts have pulled back the earnings estimate for this year by a penny over the past month and by 25 cents over the past 60 days.

This Zacks #3 Rank ("Hold") stock has gained over 12% today amid lower-than-usual volumes.

"LVS" Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research

Hutchison Soars on Spin-Off Speculation – Zacks Tale of the Tape

Zacks Market Commentaries — Mon, 02 Mar 2009 21:02:58 +0000

Hutchison Telecommunications International Ltd. (HTX) rose more than 10% today on reports that the company was planning to raise about $256 million from spinning off its Hong Kong telephone business in an initial public offering later this year.

Although the company did not provide much detail on the sale, it is being widely speculated that its Hong Kong and Macau businesses could fetch up to $1.54 billion. The spin-off will also help offset some of the losses made by Hutchison's operations in Thailand, Indonesia, Vietnam and Sri Lanka. The company generates most of its revenue from Hong Kong, Macau and Israel.

The Hong Kong-based company's shares were up 35 cents to $3.79 at noon on the New York Stock Exchange.

"HTX" Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research

Wynn Resorts (NASDAQ:WYNN): Downgraded to Underweight, $21 tgt at Keybanc

Notable Calls — Wed, 04 Feb 2009 12:27:00 +0000

div style="text-align: justify;"Keybanc is out with a downgrade on span style="font-weight: bold;"Wynn Resorts (NASDAQ:WYNN) /spandowngrading the shares to Underweight from Hold after the co announced substantial labor cost cutting initiatives for its Las Vegas properties.br /br /span style="color: rgb(255, 0, 0); font-weight: bold;"Firm notes this is the first time they can ever remember this management team taking such drastic measures./span In addition, on a conference call Steve Wynn commented that spending (labor, marketing, promotions,etc.) on the Encore opening was of a magnitude consistent with a boom time economy. These two data points combined with a severe recessionary climate in both of WYNN's markets cause them to lower their 4Q08 earnings estimate and reevaluate their investment opinion on these shares.br /br /Keybanc is lowering 4Q08 EPS estimate to $0.40 from $0.45 (consensus is at $0.52) and believes there are few companies in the gaming sector with near term prospects and catalysts. Longer term, Wynn Resorts has among the best growth pipelines in the industry. Between 150 well located acres in Las Vegas and a 52-acre site on the Cotai strip in Macau, WYNN should be set for the next five to 10 years growth. That being said, the skittish investment climate today does not augur well for any gaming company and they are afraid WYNN's shares will under perform over the near term. The combination of negative group psychology, today's revelations and our new lower than consensus estimates, necessitates us re-instituting an UNDERWEIGHT investment rating on WYNN, with a downside price target of $21.br /br /span style="color: rgb(255, 0, 0);"Notablecalls:/span This stuff does not look good. I think the stock can go to $20 in a jiffy if current sentiment prevails in the n-t. Definitely not saying WYNN is similar to LVS or MGM but I'm just hard pressed to see any meaningful buyers step up around here.br /br /span style="font-weight: bold;"Couple of pts of downside is what I think may be in store for WYNN today./spanbr /br /Oh and btw, Merrill/BAC is lowering their tgt on span style="font-weight: bold;"MGM Mirage (NYSE:MGM) /spanto $5 from $11.br //div

Why Asia Could Be The Best Place To Park Your Money

Irwin Greenstein — Wed, 28 Jan 2009 18:52:50 +0000

pA new labor report by an agency of the United Nations indicates that Asia could be the best place for investors to wait out the global recession. While the report does not indicate abundant opportunities in Asian regions, it does show that Asia could be more resilient and consequentially return potential longer term gains. /p pFor investors in survivor mode, the report may be interpreted as an investment roadmap with a relatively safe course./p pThe report, titled Global Employment Trends, is an annual survey from the International Labour Office (ILO), arm of the U.N that brings together governments, employers and workers to jointly shape policies and programs for fair and humane employment practices./p pBased on new developments in the labor market, the report#8230;/p

Elixir Gaming Technologies Inc. (EGT) is “One to Watch”

QualityStocks — Tue, 16 Dec 2008 22:27:45 +0000

Trading on the American Stock Exchange (AMEX), Elixir Gaming Technologies Inc. provides turnkey gaming solutions to venue owners. They work with their major shareholder Elixir International who is part of the Melco Group. Elixir Gaming’s main business is the placement of gaming machines on a revenue share model in three, four and five star resorts, [...]

Short WYNN For 15-20% Gains By New Year’s

Contrarian Profits — Mon, 24 Nov 2008 14:27:04 +0000

pstrong /strongTwo years ago, the pundits were agog over the prospects of the former Portuguese enclave of Macau. Fueled by fast-earned money burning a whole into the collective pockets of the emnouveau riche/em Chinese middle class, Macau surpassed the Las Vegas Strip as the world’s most lucrative casino market.strong /strongBut growth has stalled… not just in Macau but everywhere businesses depended on drunk sales reps blowing little Pugsley’s college fund at the blackjack table during a convention./p pTo stay in Vegas, you’d have to get to Vegas. And that costs money no-one is willing to spend right now. Accordingly, the supposedly recession-resistant vice stocks are taking it on the chin. Just yesterday [Thursday], we claimed our owna href="http://www.todaysfinancialnews.com/us-stocks-and-markets/cover-your-shorts-on-lav-vegas-sands-lvs-and-take-20-some-percent-profits-5455.html" 25% short profits/a share from the collapse of Las#8230;/p

Could China’s Deal With Cuba Depress Commodity Prices?

Irwin Greenstein — Thu, 20 Nov 2008 13:24:13 +0000

China’s President Hu Jintao just concluded on a victorious trip Havana on Tuesday - expanding a trade pact that could divert commodities from open spot markets.

It’s no secret that China has largely been responsible for the commodity run-up of the past few years. Now the question remains if the latest deal with Cuba could give China a new lost-cost provider of commodities. If so, it could be a bit of bad news for investors looking for a China-driven commodities run-up.

On Tuesday, Chinese president arrived in Cuba as part of a Latin American tour to strengthen ties with the resource-rich region. And his timing was impeccable.

Just weeks after Cuba’s farm sector and overall economy were rocked by three hurricanes which inflicted…

Short Las Vegas Sands (LVS) For 20-30% Gains By Christmas

Contrarian Profits — Mon, 17 Nov 2008 12:51:25 +0000

J. Christoph Amberger says the casino industry is following the automaker sector into deep water. He says Las Vegas Sands Corp. (NYSE:LVS) stock is likely to keep on sinking as access to credit dries up. Short traders have a chance to make 20-30% gains by Christmas.

This from Today’s Financial News:

Despite the substantial drop in the U.S. equity markets, Las Vegas Sands Corp. (NYSE:LVS) gained over 9% today. The company is currently in talks with a syndicate of banks to raise between $1.5 billion and $2 billion to finance new casino projects in Macau. The company had suspended construction on its expansion into Chinese gaming, laying off most of the 11,000 construction staff.

The stock price has dropped from over $122 last December…

Las Vegas Sands (NYSE:LVS): LVS raises dilutive capital but eases balance sheet strain – Goldman Sachs

Notable Calls — Wed, 12 Nov 2008 12:16:00 +0000

Goldman Sachs is out positive on Las Vegas Sands (NYSE:LVS) after the co announced an additional capital raise of $2.1bn.

Firm is maintaining their Buy rating on the shares but acknowledge that it will take time for full value to be realized and in the near term exogenous factors (visa restrictions loosened in Macau/broader global macro travel environment) and non core factors (condo sales in Macau) will drive operating results and share performance. The reason they are maintaining their constructive view is that at this point much of the bad news is in the stock and there is significant “option” value if trends recover and future growth opportunities (additional development in Macau) rematerialize.

Goldman is lowering their 12-month price target (based on sum-of-the-parts) to $9.50 from $25 based on lower estimates and to take into account the dilution from the capital raise.

Notablecalls: I suspect the stock is ready for a bounce here. It broke the $5.50 pricing yesterday in a hurry but given the fact they have avoided insolvency at least for the time being, big money operators will be looking to shake out the shorts.

PS: Note Jefferies is also out in defense of LVS saying they still believe in the co. LVS. The capital raise keeps LVS solvent in the near-term, and the long-term value is substantial with company forecasted 3.0x leverage in '12 (EBITDA $3.5bb). Firm's new target comes to $19 vs. $44, to reflect the dilution from yesterday's securities issuance and significant model revisions.

Las Vegas Sands puts the brakes on Macau

Tony Sagami — Tue, 11 Nov 2008 21:24:17 +0000

Even the casinos in mighty Macau are raking in less money these days. How much less? Less enough that Las Vegas Sands is halting construction on its new projects.

"Given the current conditions in the global credit environment, we have elected to significantly slow the pace of our development activities" in Macao, said Las Vegas Sands COOWilliam Weidner.

Edmund Ho, the top Macau official, said he expected monthly gambling revenue in Macao to drop to about $876 million in 2009, down from the monthly average of about $1 billion this year.

The good news is that LVS is going full steam ahead with its Singapore plans.

Standard & Poor’s Makes Changes to Indices

Daniel Shepard — Tue, 11 Nov 2008 01:13:28 +0000

Monday November 13, 2008 Navivest Standard & Poor’s is making changes to the S&P 500 and the S&P 400 MidCap. Following are details of the changes: Wynn Resorts Ltd. (WYNN) is replacing Ashland Inc. (ASH) in the S&P 500, Ashland will replace Lear Corp. (LEA) in the S&P MidCap 400, S&P MidCap 400 constituent DENTSPLY International Inc. (XRAY) [...]

Ferrari, Lamborghini sales strong in China

Tony Sagami — Fri, 03 Oct 2008 14:32:37 +0000

China is minting more millionaires than any country on earth these days.

Proof: Ferrari sales increased by 25% and Lamborghini sales increased by 60% in the first nine months of 2008.

Ferrari's busiest store, by the way, is in Macau.

Sales in the U.S., by contrast, declined by 5%.

Four Seasons Opens in Macau, CEA Relaunches Wuxi-HK Flight

Biz China Update — Wed, 17 Sep 2008 23:01:27 +0000

Four Seasons Opens in Macau Las Vegas Sands, the developer of the Cotai Strip in Macau, has opened a 360-room Four Seasons hotel on the site. The new property follows almost one year after the Las Vegas company opened its first integrated casino resort, the Venetian Macao, on the new strip....

On-the-ground in Asia …

Larry Edelson — Mon, 08 Sep 2008 13:13:57 +0000

Right now I'm on a tour through Asia and judging by what I’m seeing here, there are very few signs of a slowdown!

I am seeing the same vibrant economies wherever I go. In Macau ... in Hong Kong … in Thailand (despite yet another government coup) … and in the mother of all Asian economies, China.

Given what I'm seeing here in Asia, and the current pullback in oil and gas prices, I think now is a great time to take a look at Asian energy companies. Three of my favorites that I think are in the cat-bird seat to feed China's intensely growing energy needs: China Petroleum & Chemical (SNP), CNOOC Ltd. (CEO), Yanzhou Coal Mining Co. Ltd. (YZC).

Keep in mind the pullback you’re seeing in oil and gas prices is nothing more than a much overdue correction in the market. All of my indicators continue to strongly suggest that we will see $150 oil and then $200 oil early next year.

So don’t let any bearish comments on the energy markets steer you away from the long-term trends ... whether energy or Asia!

Skechers JV Grows Its Operations In Hong Kong And Macau

China Retail News — Thu, 04 Sep 2008 19:31:46 +0000

Footwear company Skechers USA, Inc. has expanded its operations in Hong Kong and Macau through a joint venture — Skechers Hong Kong Limited — with the Onwel Group, a leading fashion company in the region. The new joint venture in Hong Kong follows on the heels of Skechers China Limited, a joint venture with Luen Thai [...]

My Three Top Asian Energy Companies …

Larry Edelson — Thu, 04 Sep 2008 07:30:00 +0000

I'm writing this while on a short holiday in Macau, Asia's booming Las Vegas. And let me tell you (again) — judging by what I'm seeing in Macau, there are very few signs of a slowdown in ...

Investment Banker Confirms My #1 Rule for Profits!

Tony Sagami — Tue, 02 Sep 2008 07:30:00 +0000

When I am in Asia, I'll talk to anyone I think can help me find the next home run stock. I have often learned a great deal by talking to bellmen, taxi drivers, sales clerks, or the lone diner at ...

Macau gambling roars ahead

Tony Sagami — Tue, 19 Aug 2008 23:33:59 +0000

The government of Macau, like the State of Nevada, places on a tax on casino's gambling profits. Macau takes 35% of a casino's gross revenue as a tax.

The Macau Special Administration Region casino tax revenues jumped by 51% in the first seven months of the year to $3.03 billion.

Anybody that doesn't believe in the long-term potential of the Macau casinos is on the wrong side of the trade.

Investing in Human Capital – Quantity or Quality?

Claus Vistesen — Wed, 09 Jul 2008 07:08:14 +0000

A mail from a friend today alerted me to this fine op-ed in the IHT by Philip Bowring. Bowring's main point is quite neat even if of course the ultimate conclusion to re-write the practices of national accounting may be a bit far-fetched. Bowring's starting point is the economies of East Asia which, I am sure my readers will, agree have performed quite well in the 1990s and 2000s with the important intermezzo of the Asian currency crisis in 1997. In fact, one could argue that with the crisis in 1997 East Asian economies embarked on an even further solidified path of growth driven by investment and accumulation of capital and, we should never forget, foreign exchange reserves. You see, this was part of the scheme at the offset in the sense that these economies would not risk to go hat in hand to the IMF the next time crisis loomed at the doorstep. This is not about the Asian currency crisis and its aftermath per se but if you want more I have a synopsis up here.

Philip Bowring starts off with the simple point that although East Asian economies in general have been doing very well on the investment front with respect to physical capital (and according to many the quality of human capital) they have not been able to halt the demographic transition which to a considerable degree has eroded the quantity foundation of these economies' human capital. In this way and as if guided by an invisible force, these economies have also transcended into lowest low fertility (TFR < 1.5) and in fact some economies are hovering around the "single child per women" mark. This makes Mr. Bowring wonder whether in fact the economic experience of these economies are so stellar as we are lead to believe.

South Korea, Hong Kong, Taiwan and Singapore have over 40 years averaged roughly the highest consistent economic growth rates in the world. All but Korea have steadily accumulated massive surplus savings and foreign reserves. But change the national accounting principles behind these rosy numbers and a different picture emerges, one that the societies concerned have barely begun to grapple with. In one vital respect these countries (soon to be joined by China) collectively may have the worst record of investment in the future since homo sapiens evolved: Investment in the next generation.
They have the lowest fertility rates in the world. Hong Kong is at the bottom (excluding births to non-residents), with around 1.0 births per woman of child-bearing age (the replacement rate is 2.1). Taiwan, Singapore and Macau come in at 1.1, while South Korea, at 1.2. is on par with Europe's lowest, Belarus. None of these economies has had replacement-rate fertility levels since the late 1980s.
(...)
Imagine if these four economies had invested less in infrastructure and reserves and more in people. They would now most likely have much lower foreign-exchange reserves, but they would not be facing a situation in which their work forces - unless replaced by immigrants - will decline dramatically within 20 years as the population over 65 continues to grow. The payback for years of what may well have been the misallocation of resources is not far in the future.
(...)
Almost all developed and many developing countries now face demographic challenges from a reverse in the high fertility rates of the past. There are no easy solutions. But by changing national accounting principles to make child-rearing a priority, attitudes toward it might change too.

Bowring's piece poses a lot of intertwined questions which I cannot dwell by here. One would be whether the cultural edifice of Neo-Confucianism is particularly 'adept' in fostering lowest-low fertility (or high household saving rates perhaps?). In this note I shall neatly bypass this question. However one crucial question which emerges from Bowring's piece is whether economists are adequately defining investment in human capital? Now, Bowring's suggestion to change national accounting practices does not, at a first glance, make sense. It would hardly be possible to make a credible short term/high frequency measure of investment and accumulation (say, quarterly) in quality (e.g. education) and quantity (e.g. some form of fertility gauge) of human capital. Yet national accounting is not the only tool economist use to describe the growth of economies. Consequently, when looking at growth in the longer term economists refer to the collective sub-discipline of growth theory or more specifically neo-classical growth theory.

Within the context of neo-classical growth theory the contributions are multiple and I won't even try to provide an overview. Mankiw, Phelps and Romer's Growth of Nations is an excellent starting point for the intermediate scholar.

Without cutting further corners my main gripe with the growth theory framework is that economists traditionally (and this is especially the case in the context of the whole growth theory framework) tend to separate quantity and quality of human capital in a quite unsatisfactory manner. You see, according to growth theory it is a well known dictum that more people leads to lower growth in the illusive steady state. The point here would be that we are getting more people for the same capital and productivity level and thus more people to share the same sized pie. Yet, human capital does matter. As such, Mankiw et al. famously showed that investment in (i.e. accumulation of human capital) is highly conductive of economic growth. This would then mean that investment in education be considered a highly fruitful policy; I hardly think anyone will disagree here. This point also forms a strong link to Bowring's perspective of East Asia since, apart from choosing export orientation over import substitution, these economies were praised for their high saving rates not least in the context of a strong focus on education and especially high enrollment in basic education. At the time they were thus bathing in the spotlight on the expense of their developing economy siblings in Latin America.

The two points made above on human capital basically shore up at the following main point in the context of growth theory.

Few people of high quality (education) is the way to go!

However, it is pretty clear I think that this is not true. At least, there seems to be quite strong evidence that not only quality matters but also quantity. Moreover, if everybody goes for the low quantity high quality option it will create strong negative externalities. In fact, the quantity/quality nexus of human capital is much more complicated with respect to feedback loops than the current standing theory assumes. Basically, the whole model seems to break down once we get into the situation of lowest-low fertility. Especially in this regard would be the concept of steady state which becomes very difficult to sustain in an empirical context in the sense that it becomes a proverbial moving target.

It is within this quite wonkish framework that Bowring's point suddenly makes sense. What he suggests is thus that in stead of focusing solely on the quality of human capital we should also look at the quantity. What he is in fact latching on to is the very finely tuned linkage between the two. The point is simply here that when economies emphasise education (quality of human capital) and especially of women as a natural part of the development process they would be wise in also focusing on quantity measures since, as other economists so famously showed, there is a tradeoff between quantity and quality in child rearing. Add to this the tempo (birth postponement) effect of fertility which comes from pushing the whole life course framework of women as they enter the labour market and you end up with a bad policy if taken too far. Moreover, evidence suggests that once the decision is made to go aggressively for quality without making sure that quantity is kept stable it is very difficult (if not impossible) to bend the stick back again.

This is what many Asian countries now confront I feel.

It's Both Actually ...

In many ways, this should not be too difficult to understand but often the debate gets completely loop sided because people focus on population growth rather than population structure. Moreover, once population structure is incorporated into the growth theory framework the goings get quite tough in terms of mathematical model complexity. Yet, as the main conclusions of the neo-classical framework persist the critique remains the same.

Interestingly, this is also why Bowring's comparison of human capital investment (the quantity) with investment in infrastructure is only as good as it goes. Roads can be built within a reasonable time frame (well, if you have the workers that is) but human capital is another matter. Basically, the decisions you take today will only matter in some 20-30 years time and the decisions you took decades ago are only making their presence felt now. This is what path dependency is all about really and also what policy makers in countries such as India, Turkey, Brazil, Morocco (I think it is too late for China) etc. would be wise to consider; both for their own good and the rest of us . The lesson here is then that while no-one can disagree in putting aside investments for the quality of human capital as well as working to get women integrated into the labour force one would be wise to also consider the quantitative perspective.

Global Gaming Expo in Macau

Tony Sagami — Wed, 04 Jun 2008 00:17:39 +0000

I am off to attend part of the 3-day Global Gaming Expo being held at the Macau Venetian. I hope to learn what countries are the most likely to offer Vegas-style gambling in the future (my money is on Taiwan) and more importantly, see with my own eyes what publicly traded casinos are raking in the biggest profits.

Earnings Preview

Trader Mark — Mon, 05 May 2008 22:00:00 +0000

We have 2 late filers tonight in Brazilian homebuilder Gafisa (GFA) and American iron ore producer Cleveland Cliffs (CLF). It looks like they will be reporting later in the evening, but I expect positive things from both - but wish to hear something ne...