Las Vegas Sands Is Raking In The Chips

| About: Las Vegas (LVS)

Las Vegas Sands (NYSE:LVS) reported earnings late Wednesday. Based on pre-market activity, investors seem disappointed despite the company easily beating earnings expectations. I would use any weakness Thursday to pick up a stake in this fast growing gaming concern.

Key Highlights from the earnings report for LVS:

  • Adjusted EPS of 70 cents a share beat expectations by a dime. Earnings were up 89% Y/Y.
  • Revenues came in at $2.76B, $140mm better than estimates and up 31% Y/Y.
  • Revenues (Y/Y) were up 25% in China (Macau), 45% in Singapore and more than 25% in the United States.
  • RevPar was up almost 16% across its properties and its newest resort in Macau opened on April 11th.
  • Occupancy was over 82% for the quarter, substantially above the under 65% occupancy of 1Q2011.

Las Vegas Sands - "Las Vegas Sands Corp., together with its subsidiaries, owns, develops, and operates various integrated resort properties primarily in the United States, Macau, and Singapore". (Business Description from Yahoo Finance)

4 additional reasons LVS will reward investors long term from $58 a share:

  • The company is the largest foreign operator in the largest gaming area (Macau) in the world. Its lead should expand with the recent opening of Sands Cotai
  • The stock has a five year projected PEG (.80) that suggests investors are undervaluing the company's growth prospects and analysts expect 25% revenue growth in FY2012.
  • Consensus estimates for FY2012 and FY2013 have edged up over the last two months. Based on latest earnings report, I would look for that trend to continue.
  • Credit Suisse has an "Outperform" rating and a $68 price target on LVS. The analyst firm cites strong cash flow as one factor in their rating. LVS quadrupled operating cash flow from FY2009 to FY2011.

Disclosure: I am long LVS.