This is a cope of what I wrote on my blog this weekend
I will be attending the Money Shoe in Las Vegas this weekend. Every November the money show puts on the Traders expo. I have not been to this show in the last few years now but with three stocks located in Las Vegas that I am watching I thought this years Vegas event would be well worth it.
LVS, BYD and RICK all have locations in Las Vegas. While LVS and BYD are based in Vegas, LVS largest market is actually in Macau. I have been to the Sands in Macau but not the Venetian. While revenue is down in Macau the casinos are still busy and I expect that business will be at least good enough in Macau to allow all the properties to remain not only solvent but profitable. I further expect that projects being down in Macau will be able to get financing and most likely from Chinese banks. With customers coming from many locations including a large amount from Taiwan, and Japan its hard to imagine that Chinese officials will allow any of that business to migrate to Singapore that they can stop. I think it would be a foolish bet to think otherwise. Mr. Sheldon Adelson enjoys controlling interest even after the recent offering that diluted the shares. Currently Mr. Adelson has about a 51% ownership. Stock holders don't care how rich Mr. Adelson becomes but they do care about how rich the LVS stock becomes. Its no secret that the office of CEO wasn't done with fixtures from Kmart and how much share holder value is diminished from the amount of space that the office takes up. Perhaps if Vegas ever gets a baseball team they can play games in there.
Despite the shortcomings, LVS is one of the few stocks that at current prices can be bought and held. It offers a large Chinese presence with American management and several high end properties in America. Another website that I do pay attention to is optionmonster.com and they are reporting (11-13-08) that based on their criteria LVS options appear to be showing a bullish signal as well. I Expect LVS to outperform the industry but I will only buy on dips.
RICK is primarily in the business of operating strip bars throughout the US with its new flagship property in Vegas just opening up. RICK like the rest of the market has had its stock beaten up like they are about to fail. The statements and reporting coming out of RICK up to this date do not suggest the same. In fact RICK seems to be hitting on all cylinders and doing many things very well in a market were very few are. While RICK offers a zero yield currently, it would not be hard to imagine what a dividend would do to really send this stock higher. RICK seems to offer something for everyone. Cash flow? check, good business model? check, Profit? check, ability to expand? check. yes, in my opinion RICK is sinfully wonderful and that's were the challenge lies. unfortunately every location that RICK has a risk to ruin. Not due to market forces but rather a larger less intelligent peril. City councils, state legislatures, and all the way up to the supreme court seem to all have an opinion that changes with the wind as to what is ok and what is not. To a much lessor extent there are those that simply will not buy a company because they are against the product that they offer. Its these same perils that allow others to prosper when they correctly analyse the risks. Unlike VCGH which is another strip club chain RICK so far has not made some of the same mistakes like having a stock buyback(I will be writing a post as to why stock buybacks are almost always a poor choice). While I liquidated my RICK holdings near $13 I think at the current price of Sub $6 it may be one of the best risk to reward opportunities available in the small caps. If they can continue to execute at the current levels while adding locations
BYD is the third stock that I will be spending some time looking at. In the several times that I have looked at the Orleans property I believed that they had a pretty good offering. I have been less impressed with the strip property from the quick overviews that I have seen(one should always be careful not to be too quick to judge a book by the cover though). The stock price has been hammered by the slowdown in Vegas like its a follower instead of a leader. I hope to be able to get a better sense as to the amount of accuracy the stock price is showing.
So as of now I have no opinion on BYD but I will report what I find.
I will be attending the Money Shoe in Las Vegas this weekend. Every November the money show puts on the Traders expo. I have not been to this show in the last few years now but with three stocks located in Las Vegas that I am watching I thought this years Vegas event would be well worth it.
LVS, BYD and RICK all have locations in Las Vegas. While LVS and BYD are based in Vegas, LVS largest market is actually in Macau. I have been to the Sands in Macau but not the Venetian. While revenue is down in Macau the casinos are still busy and I expect that business will be at least good enough in Macau to allow all the properties to remain not only solvent but profitable. I further expect that projects being down in Macau will be able to get financing and most likely from Chinese banks. With customers coming from many locations including a large amount from Taiwan, and Japan its hard to imagine that Chinese officials will allow any of that business to migrate to Singapore that they can stop. I think it would be a foolish bet to think otherwise. Mr. Sheldon Adelson enjoys controlling interest even after the recent offering that diluted the shares. Currently Mr. Adelson has about a 51% ownership. Stock holders don't care how rich Mr. Adelson becomes but they do care about how rich the LVS stock becomes. Its no secret that the office of CEO wasn't done with fixtures from Kmart and how much share holder value is diminished from the amount of space that the office takes up. Perhaps if Vegas ever gets a baseball team they can play games in there.
Despite the shortcomings, LVS is one of the few stocks that at current prices can be bought and held. It offers a large Chinese presence with American management and several high end properties in America. Another website that I do pay attention to is optionmonster.com and they are reporting (11-13-08) that based on their criteria LVS options appear to be showing a bullish signal as well. I Expect LVS to outperform the industry but I will only buy on dips.
RICK is primarily in the business of operating strip bars throughout the US with its new flagship property in Vegas just opening up. RICK like the rest of the market has had its stock beaten up like they are about to fail. The statements and reporting coming out of RICK up to this date do not suggest the same. In fact RICK seems to be hitting on all cylinders and doing many things very well in a market were very few are. While RICK offers a zero yield currently, it would not be hard to imagine what a dividend would do to really send this stock higher. RICK seems to offer something for everyone. Cash flow? check, good business model? check, Profit? check, ability to expand? check. yes, in my opinion RICK is sinfully wonderful and that's were the challenge lies. unfortunately every location that RICK has a risk to ruin. Not due to market forces but rather a larger less intelligent peril. City councils, state legislatures, and all the way up to the supreme court seem to all have an opinion that changes with the wind as to what is ok and what is not. To a much lessor extent there are those that simply will not buy a company because they are against the product that they offer. Its these same perils that allow others to prosper when they correctly analyse the risks. Unlike VCGH which is another strip club chain RICK so far has not made some of the same mistakes like having a stock buyback(I will be writing a post as to why stock buybacks are almost always a poor choice). While I liquidated my RICK holdings near $13 I think at the current price of Sub $6 it may be one of the best risk to reward opportunities available in the small caps. If they can continue to execute at the current levels while adding locations
BYD is the third stock that I will be spending some time looking at. In the several times that I have looked at the Orleans property I believed that they had a pretty good offering. I have been less impressed with the strip property from the quick overviews that I have seen(one should always be careful not to be too quick to judge a book by the cover though). The stock price has been hammered by the slowdown in Vegas like its a follower instead of a leader. I hope to be able to get a better sense as to the amount of accuracy the stock price is showing.
So as of now I have no opinion on BYD but I will report what I find.