From TheStockMasters
Now that the China stock craze has subsided, it’s time to pick up the pieces and look at one play that I think is worth the bet. It’s the best casino in Macau China and it’s one of the best plays you can make in the gambling world – The Las Vegas Sands Corporation (LVS).
Just as one Vince Vaughn said to his boy Mikey (played by Jon Favreau) when he was down on his luck: "you’re so money and you don’t even know it", same can be said about LVS.
Sands Corp. has been beat up since last January when it was trading around $108 a share, today it’s hovering around $87 a share. In February LVS reported a 3% rise in Q4 profit as gamblers lost more money at its Vegas casino, but results from Macau fell short of investors’ expectations and it’s been nothing but bad luck since then. Despite Macau’s operating income up 6.5% to $99.4M and its Las Vegas operating income up 73% to $111.8M it wasn’t enough to keep the stock price from getting spanked. It hurts when you’re down and out and when your down in Vegas, the pain is even worse. Chicks won’t give you the time of day, no money to tip the wait staff for free drinks, and forget the $100 tables. You can smell the desperation on guys that have been cleaned out, you start throwing out garbage lines like: "Look at this, OK? I want you to remember this face. This is the guy behind the guy behind the guy. Look at this, OK? I want you to remember this face. This is the guy behind the guy behind the guy." We’ve all tried that before and it’s not cute anymore fellas.
Earlier this month Steven Wieczynski of Stifel Nicolaus & Company said "the Sands is expected achieve significant growth in the forthcoming five years. LVS’ share price has appreciated by over 125% since 2006, and currently reflects most of the company’s growth prospects." Steven maintains his "hold" rating on Las 
Vegas Sands Corporation so there’s no beautiful babies for him insight at their casinos. So where are the beautiful babies and scared bunnies hiding? Not in trailer parks (great scene I might add) and besides Vegas? That would be Macau baby, Macau.
Last year, 22 million tourists visited Macau — up from about 7 million in 1999. Most visit the casinos. While Chinese workers make less than $150 a month, on average, many of them still march right into the Sands and throw it all away hoping to catch lucky No. 7.
Consider this (from StarNewsOnline.com): the average table in Macau earns three times more than a comparable table in Las Vegas, according to C.L.S.A. Asia-Pacific Markets, the investment bank. And some of China’s high rollers are placing $200,000 bets in exclusive V.I.P. rooms, which is one reason that Macau posted $6.9 billion in gambling revenue last year, outpacing Las Vegas. In 2001, Macau began to open itself up to a new era of casino competition, setting the stage for a phenomenal tourism and gambling boom. With China’s economy soaring and its residents being given more freedom to travel, millions of wealthy Chinese entrepreneurs flooded Macau. That’s why 21 casino operators from around the world bid for a gambling license there a few years ago. Although Mr. Ho lost his monopoly in 2002 (the dude who runs Macau just like Bugsy ran Vegas back in the day), he still managed to secure one of just three major gambling concessions Macau awarded that year, pitting him against seasoned American casino operators like Mr. Wynn (WYNN) and Mr. Adelson, CEO of the Las Vegas Sands (LVS).
Closer to home this week Mr. Adelson said he expects to fetch about $1 billion in net proceeds from the sale of luxury condominium units under construction at their Palazzo property on the Las Vegas Strip. The Palazzo is expected to open later this year, while the first phase of Sands Bethworks is to open in mid-2008. The Sands is also spending $287M to expand the Sands Expo convention center, $114M to refurbish the Venetian tower and $40M on the 14th floor of the Venezia tower at The Venetian – all in Vegas. So despite the drop in stock price, this gives Adelson and his boys something to drink to and you can bet those boys do it in style, just like Trent and Mikey.
So by picking up some shares when you and the Sands are down, it’s the perfect time to get your confidence back. Once LVS shares start to head 
back up, you’ll be back in the money, and feeling money yourself. Which is why you’ll be able to step to that girl that you know you want to talk to and walk away a hero.
Trent: Baby, that was money! Tell me that wasn’t money.
Mike: That was so demeaning.
Trent: She smiled, baby.
Mike: I can’t believe what an assh*le you are.
Trent: Did she, or did she not smile.
Mike: She was smiling at what an assh*le you are.
Trent: She was smiling at how money I am, baby.
Money baby, all the way to the bank.
Article written by: Frank Lara Jr.
Article posted on: April 18th, 2007
Disclaimer: The Author does not own any shares or hold any short/long positions in the securities mentioned in this publication but has watched Swingers 500 times.
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