Wednesday, October 3, 2007

Time to roll the dice?

Is this a buying opportunity in Las Vegas Sands (LVS)? Maybe. The stock took a nasty fall today when new figures for Macao gaming were robust (55% growth), but not as magnificent as the street had anticipated.

Forbes: Investors Lose A Bet On Macau

The stock fell nearly 12% to $127, a huge drop from yesterday's intra-day high of 145.

Little more than a week ago, I took a closer look at LVS. Found that I like the new location, the product (I actually stayed at the Venetian in Las Vegas almost a decade ago) and the open field ahead for the stock. But I couldn't conclude that a buy was in order because the stock was technically out of sight. Way, way above its moving averages, and traders who rode a big gain this year could have left the table with fat profits.

With today's plunge, the stock is well below its 10-day simple moving average (135) but still far above its 50-day SMA (107). So, is LVS a buy here?

I think the impact of the Macao numbers isn't over yet. I think there's still too much profit on the table for some traders to let this one ride. So I'm going to keep watching until LVS finds a floor. If the stock levels out and starts riding back up, I won't mind losing a few points. Trading or investing in Asia is still a fairly decent hedge against a slowing U.S. economy, and there is far too little exposure to that region in my portfolio.

Pupule says: Buy small, if at all, and/or wait for a) a better price, or b) a return by the bulls. There's a reason why I graded LVS as a B+ rather than an A or A- 11 days ago. There's no need to gamble here.

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