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The Gambling King of Asia

By Frank Curzio, editor, Small Stock Specialist
Thursday, November 4, 2010

I don't know of a better growth story than Las Vegas Sands (LVS).
 
On October 27, the casino operator reported blockbuster third-quarter results. Most of the growth stemmed from its properties in Macau. This small island surpassed Las Vegas as the gaming capital of the world. Last month, revenues topped a record $2.4 billion.
 
You see, Macau is the only place in China where gambling is legal. Las Vegas Sands owns the biggest casino on the island, the Venetian Macau. At over 10 million square feet, it's the fifth-largest building in the world based on floor space.
 
I got a chance to see this casino in August on my visit to China. The gaming floor was about three times the size of any casino I'd ever seen. Nearly every table was packed with gamblers. Plus, it was Monday night – a "low traffic" day.
 
After seeing this huge gambling spectacle with my own eyes, I suggested buying Las Vegas Sands. Since my recommendation, shares are up 75% in a little over two months.
 
 
I still think the stock has upside from these levels. Here's why...
 
On the company's conference call, management talked about the huge growth coming from its Macau properties. This was expected – especially since revenue from this area has been hitting new records month after month. However, the big surprise was the massive growth in Singapore.
 
Las Vegas Sands opened up its newest casino in the area, called Marina Bay Sands. It's one of two companies (the other based in Singapore) licensed to operate casinos in Singapore. In its first full quarter of operation, Marina Sands generated almost $500 million in revenue. That surpassed every analyst's estimate by a mile.
 
Analysts are now projecting these two casinos could generate more than $6 billion in revenue over the next 12 months. That's about the same amount of casino revenues generated by the entire Las Vegas Strip.
 
The growth doesn't stop at Macau and Singapore...
 
Las Vegas Sands is creating more jobs, providing more tax dollars to the government, and helping fuel economic growth in Macau and Singapore. Based on its impressive track record, it's first in line to open casinos all across Asia.
 
For example, Las Vegas Sands is a front-runner to open casinos in Tokyo and Osaka, Japan. Management is in talks with Korea to start a gambling hub. Also, the company is opening casinos and hotels across the street from the Venetian Macau. In other words, Las Vegas Sands is becoming the gambling king of Asia.
 
As you can see, that's a heck of a good title to hold.
 
Good investing,
 
Frank Curzio




Further Reading:

When Frank got back from his trip to China, recommending LVS was one of the first things he did. "The growth in Macau is real," Frank wrote. "It's no wonder Las Vegas Sands and Wynn Resorts have trounced the market this year." Check out his photograph and must-see chart here: I Just Saw the Greatest Gambling Spectacle in History.
 
Earlier this year, Braden Copeland also came back from China raving about Macau's casinos. When they opened up in May 2004, a crowd of 30,000 showed up to gamble. "For U.S. investors who got in on the Macau trend early," Braden wrote, "the payouts were simply astounding..." Read more here: What the Chinese Want Even More than Oil or Gold.

In The Daily Crux
Market Notes
Australian dollar hits 28-year high.
 
China oil giants CNOOC and Sinopec touch fresh highs.
 
Ford breaks out to 5-year high as car sales jump 15% vs. last year.
 
Earnings today... Unilever, Kraft, DirecTV, Starbucks.
Market Watch
Symbol Price
Change
52-Wk
S&P 500 1221.06 +1.9% +16.7%
Oil 37.49 +2.0% -8.5%
Gold 136.03 +3.4% +27.0%
Silver 25.63 +5.7% +49.5%
US-Dollar 76.39 -0.4% +0.8%
Euro 1.42 +0.5% -4.5%
Volatility 18.52 -5.3% -33.2%
Gold Stocks 548.13 +4.7% +27.4%
10-Year Yield 2.48 -5.3% -30.1%

World ETFs
Symbol Price
Change
52-Wk
USA 122.26 +1.9% +16.5%
Canada 29.93 +2.2% +21.5%
Russia 20.77 +2.3% +14.2%
India 40.35 +3.2% +42.7%
Israel 16.82 +0.7% +23.8%
Japan 10.25 +2.3% +6.7%
Singapore 14.29 +1.6% +33.8%
Taiwan 14.42 +2.2% +20.7%
S. Korea 57.79 +1.8% +31.0%
S. Africa 72.00 +1.9% +36.8%
China 47.88 +1.9% +10.9%
Lat.America 54.63 +2.8% +21.3%

Sector ETFs
Symbol Price
Change
52-Wk
Oil Service 126.45 +3.5% +6.0%
Big Pharma 66.37 +0.4% +7.0%
Internet 70.62 +0.3% +32.6%
Semis 15.20 +3.8% +37.7%
Utilities 32.06 +1.1% +12.6%
Defense 18.49 +1.9% +18.5%
Nanotech 9.83 +2.1% +1.7%
Alt. Energy 10.42 +2.7% +8.5%
Water 18.00 +2.7% +13.2%
Insurance 16.30 +4.5% +21.6%
Biotech 20.43 +1.2% +30.2%
Retail 18.53 +2.4% +25.5%
Software 24.37 +1.4% +27.5%
Big Tech 53.67 +1.2% +29.9%
Construction 12.60 +2.9% +11.1%
Media 13.34 +1.8% +27.2%
Consumer Svcs 65.99 +1.4% +27.7%
Financials 55.34 +3.2% +11.2%
Health Care 65.18 +0.7% +11.6%
Industrials 61.67 +2.3% +25.4%
Basic Mat 71.47 +3.3% +31.7%
Real Estate 57.05 +2.6% +41.0%
Transportation 88.86 +1.2% +33.3%
Telecom 22.61 +1.2% +30.1%