Las Vegas Sands: Moving Up On Macau

| About: Las Vegas (LVS)

Las Vegas Sands (NYSE:LVS) stock has performed well recently. Most of the gaming company's revenues come from Macau and in the last few weeks, the news from that region of the world has been very positive. This should continue to move this gaming stock higher.

A sampling of recent news out of Macau:

  • Wells Fargo came out with a recommendation that any Macau focused casino companies including Las Vegas Sands should be bought on any weakness due to the latest outbreak of the bird flu. Wells states concerns are overblown and Macau gaming revenue is tracking well.
  • Fitch just revised its estimates for 2013 Macau gambling revenues upward.
  • The local government just released figures showing March gambling revenues in Macau were up 25% Y/Y.
  • Finally, The Economist just published a report predicting almost 10% GDP growth in Macau this year and close to 14% in 2014.

Las Vegas Sands Corp owns, develops, and operates various integrated resort properties primarily in the United States, Macau, and Singapore. It gets the majority of its revenues from its Macau assets.

4 additional reasons LVS still is a solid buy at under $55 a share:

  1. The company has grown revenues at better than a 25% annual clip over the past five years. Analysts have a consensus revenue increase of 18% forecasted for 2013. However, based on the latest figures out of Macau those estimates will probably go up over the next few weeks.
  2. LVS is priced at 20x forward earnings, a large discount to its five year average (41.6)
  3. The company has grown operating cash flow by approximately 60% over the last two completed fiscal years. It initiated a dividend in 2012 and now yields 2.7%.
  4. Consensus earnings estimates for both FY2013 and FY2014 have ticked up over the past three months and the stock is selling at the bottom of its five year valuation range based on trailing earnings.

Disclosure: I am long LVS. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.