LVS bounces at mid-day

Like CNOOC (CEO), Las Vegas Sands (LVS) bottomed out, it seems, today. The stock plunged for a second day in a row early in the day to 121.95, then bounced to finish up almost a buck to 128.50. Wild ride, crazy roll and just like that, the pain of yesterday is all but forgotten. With revenues up only 55% in Macao, it appears that 128 is the right price for LVS today. The steep run up in the past few months is going to level off, and the all-time high of 145 (two sessions ago) could be quite distant in the horizon.

Today's volume of 7 million shares is the biggest on an up day since Sept. 18. I think the pain is over for now. The next key set of data comes out in six weeks regarding Macao revenues.

Pupule says: Buy. The stock is below its 10-day moving averages, above it's 50-day MA. No news, good or bad, in the near term. Funds could use this pullback as a buying opportunity, which is why I wouldn't be surprised if LVS is back at 145 sooner than later. I'd be prepared, however, to see the stock trade sideways and consolidate until mid-October.

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.

Las Vegas Sands betting big in Macao, Singapore

Examining casino resort stocks this afternoon. Leading off is Las Vegas Sands, owner of the palatial Venetian hotels. Talk about opulent.

Las Vegas Sands Corp. (LVS) $129

• The skinny
A major player in Macao with a $2.4 billion, 32-story Venetian. I stayed in the Las Vegas Venetian about eight years ago for a conference. (Free for me, of course. I'd never spend that kind of money for a place I hardly stay in.) We spent so much time in seminars that all I saw of my opulent room was a few minutes before sleeping and a few minutes after waking up. I did enjoy the incredible beauty of the hotel, though.

• Earnings
Numbers are bullish for 2008.





• Fundamentals
See the numbers at Yahoo Finance.
Solid margins. No question, earnings growth and cash flow numbers were hit by the buildout in Macao.

• Chart
LVS has exploded in the past two weeks, from an 87-110 range to the current 129. Trading far above its simple moving averages.





















• News
1. LVS is raising $3.3 billion in loans to build in Singapore, according to a story on Friday.
SINGAPORE (Dow Jones)--U.S. gaming giant Las Vegas Sands Corp. (LVS) has mandated eight banks to arrange a S$5 billion ($3.3 billion) debt facility, the largest high-yield syndicated loan for a project in Asia ex-Japan in several years, two bankers close to the deal said Friday. Las Vegas Sands will use the money for the construction of the Marina Bay Sands casino in Singapore.

See a photo of the Marina Bay Sands in Singapore, due to open in 2009.

2. S&P downgraded LVS on Thursday.
The shares have doubled in the past year and appreciated nearly 39% over the past month. Now, with shares sporting a price 139X trailing earnings, we see them as significantly overvalued. While LVS will likely enjoy benefits of its development projects, including possible rapid EPS growth, the shares are nonetheless priced at nearly double the peer-average P/E ratio on '08 EPS. We lower our assumed weighted-average cost of capital and, following LVS's early successes in Macau, we are boosting our target price by $17 to $117. But at current market prices, our opinion is sell.

I don't consider LVS a screaming buy, nor do I think it's forgettable at these levels. This is clearly tied to the US and Asian economies, and certainly a way to play the China market. I think Macau is golden. Even if the US economy slows, the coffers of average and high-end Chinese citizens are growing by leaps and bounds. Some of those high-end folks will filter down to Macau and add to LVS revenues. Hard not to like this stock. Just not at this current level.

Grade: B+. There are clearly questions about an oversaturation of hotel rooms in Macau. I'm optimistic, but cautiously so.

Pupule says: Wait.