MGM International to Double In 2012

 The Majestic MGM City Center in Los Angeles

 The Front Entrance View of City Center in Las Vegas

Well it has been more than 7 months since my last analysis on March, 2011. Well, I am back now, and this time, I am going to analyze MGM International. The title for this post may be a little too much as, I believe, it is indeed very tough for MGM to double in price for 2012. The title is indeed to catch your attention for it. However, I am determine to speculate MGM stock based on the range trading from $9 to $16.

Based on the long term chart, MGM is currently showing a side way trend with price ranging from the resistance at $16 and the support $9. As can be seen from the chart above, MGM has tried 3 attempt to break the upward resistance of $16 but failed miserably. For those who are in this for a long term and expect price to double or quadruple, I will suggest to go in if it manage to break the resistance $16 level and the $16 level became a support. Based on the above chart, for the short term, I am expecting MGM to retest the resistance at $16. Going in at current price of around $10-$11, one is expecting to make more than 40% it can climb up and test the resistance of $16. Both MACD and Stochastic indicators do not really show any major meaning for MGM next movement.

 As per the short term chart indication, it looks very positive. I am particularly very interested in the candlestick formation as per the red circle above. For me, I name it "staircase" pattern which is very strong upward indication in the short run. I have seen many candlestick pattern such as that above and 90% of the time, the stocks will continue its upward movement.

Based on the MACD indication, it does indicates that MGM will continue its upward move as it is currently still way below the overbought level.

As per the stochastic indicator, it does show a little negative view as it touches the 80% line above which indicates a slight overbought situation. However, as long as the blue line did not cross below the red line and both line moving downward, it is still an upward trend for me.

As for the volume indication during the last 4 days, I particularly like the strong upward push in high volume as per shown on the arrow in the above chart, which is then follow by 3 low volume indication. It means that the upward push is currently consolidating with low volume for 3 days, before another upward push with strong volume to prevail.

 

 Extract from CNBC

As from the Sales Revenue for MGM for the last quarter, I am very please as it does show a big jump from $1.8 billion to $2.2 billion. It looks superbly good to me. If MGM can continue to show Sales Revenue increased as per the last quarter, I am very convince that MGM stock price will not only double but quadruple. Even though MGM still shown a negative 25 cents per share, I am convince that it will break even or turn to profit, if the magnificent performance for MGM to continue.

For the market news on this stock, I have few articles and analyst upgrade for this stock. This is also one of the reason which prompted me to go and bought around 70% of my cash holding in this stock. Most of the news indicated that MGM is currently turning around with substantial growth in revenue for the coming months. MGM largest investment in City Center Las Vegas has also started to bear fruit with increasing RevPAR ("Revenue Per Available Room") improve tremendously. Other analyst pointed that the Jewel of the Crown business in Macau is also performing very well and also manage to increase its revenue percentage as compared with competitors such as LVS, Melco Crown, and Wynn. It means that it is actually stealing more and more customer from its competitors which is a very positive indication for MGM stocks.

I have bought MGM International at an average price of around $10.70. I am expecting MGM to move at least to $14 before it starts to consolidate and then we should decide again based on the chart at the point in time. 

For those who want to follow me and bet on this stock. You can go in at any price below $11 for a short term gain of around 25% at least.

Although I am not from any licensed brokerage firm or famous analyst in the top financial firms, but I am confidence that I will make profit this time on MGM. I did not receive a single cents or goodies from anybody, unlike those licensed brokerage or analyst out there, I am analyzing this stock MGM International purely based on my fate and believe on my many years of investing in the ever turbulence stock market world.

Follow as you wish. Last but not least, Happy New Year and good luck on trading. May you double your profit for 2012. All the best!!!!!!

Could This Stock Still Be a Great Bet? MGM, LVS, WYNN?

By Jordan DiPietro

It's no secret that the Great Recession has put an enormous dent on the income statements of gaming companies worldwide. Once upon a time, the entertainment industry was a "first in, first out" position when a recession hit; this time around it's more like "first in, last out." Hotels have seen their occupancy rates plummet, while the average gambling budget has sunk from $627 in 2005 to just $482 today. In and around the strip, unemployment hangs wearily at 14.7% while Nevada just saw the 44th consecutive month of having the most U.S. housing foreclosures.

Needless to say, things are not looking too dazzling in the city of bright lights.

Not returning anytime soon

Yet somehow despite all the aforementioned obstacles, companies like Las Vegas Sands (NYSE: LVS), MGM (NYSE: MGM), and Wynn Resorts (Nasdaq: WYNN) have all managed to see 25%-plus gains in their share price so far this year. And even with all the currents of competition in Macau, the world's hottest gambling hub, Hong Kong-based Melco Crown Entertainment (Nasdaq: MPEL) has managed a solid 60% spike in 2010.

There's no doubt that investors have had some reason to celebrate; however, this does not disguise the fact that most gaming stocks have tremendously high valuations and are crippled with debt. Las Vegas Sands debt/equity ratio is 165%, MGM's is 458%, and Wynn's is 105%. Capital-intensive projects have to be paid for years in advance with the anticipation that demand awaits and consumer spending will be adequate. But who's to say that once the recession ends (I know, I know -- it's already over), gaming will see the spark that we're accustomed to?

Recently, Keith Foley, a senior vice president at Moody's Investors Service, said "although gaming dropped with this economy, don't automatically assume that when the economy comes back people will start gaming at the same level."

This industry, for sure, is not for the faint of heart.

One silver lining?

Las Vegas Sands is currently trading for 32 times next year's earnings; it's certainly not cheap, but it's also expected to grow by 85% over the next five years. Unlike heavily indebted MGM, Las Vegas Sands is managing to deleverage, as it announced in August that it would be paying down more than $1 billion in outstanding debt.

Unlike competitor Boyd Gaming (NYSE: BYD), which has no international exposure and is seeing both revenues and earnings decline, Las Vegas Sands has multiple complexes in Macau and operates one of the two big facilities in newly minted Singapore. Neither Wynn nor MGM has broken into the Singapore market, which gives Las Vegas Sands a great first mover advantage.

In fact, Las Vegas Sands was recently upgraded by KeyBanc Capital Markets, partly in reference to its increasingly successful operations in Singapore. Some industry insiders are saying that Singapore could be the most profitable gaming market in the world, as it has lax regulations and low taxes. Already, earnings for Las Vegas Sands rival Genting Singapore have exceeded second-quarter market expectations, illustrating the massive opportunity there is on the Asian state-island. Gaming equipment providers like Shuffle Master (Nasdaq: SHFL) and International Game Technology (NYSE: IGT) are already banking on growth in Singapore, as both are expecting new installments to boost revenue. By some figures, tourist arrivals in Singapore could pop from 11.5 million in 2010 to 17 million by 2015 -- an ambitious target but one that could easily be met with help from a government eager for tax revenues and a diversified economy.

It's no secret that the appetite for gambling is greater in Asia than it is outside of Asia; if companies like Las Vegas Sands can continue to grow their empires, pay down debt, and control their costs, we could just see a bright future after all -- at least for this company.

Is Las Vegas Sands the Perfect Stock?

Is Las Vegas Sands the Perfect Stock?

By Dan Caplinger | More Articles

October 1, 2010

Everyone would love to find the perfect stock. But will you ever really find a stock that gives you everything you could possibly want?

One thing's for sure: If you don't look, you'll never find truly great investments. So let's first take a look at what you'd want to see from a perfect stock, and then decide if Las Vegas Sands (NYSE: LVS) fits the bill.

The quest for perfection

When you're looking for great stocks, you have to do your due diligence. It's not enough to rely on a single measure, because a stock that looks great based on one factor may turn out to be horrible in other ways. The best stocks, however, excel in many different areas, which all come together to make up a very attractive picture.

Some of the most basic yet important things to look for in a stock are:

•Growth. Expanding businesses show healthy revenue growth. While past growth is no guarantee that revenue will keep rising, it's certainly a better sign than a stagnant top line.

•Margins. Higher sales don't mean anything if a company can't turn them into profits. Strong margins ensure a company is able to turn revenue into profit.

•Balance sheet. Debt-laden companies have banks and bondholders competing with shareholders for management's attention. Companies with strong balance sheets don't have to worry about the distraction of debt.

•Money-making opportunities. Companies need to be able to turn their resources into profitable business opportunities. Return on equity helps measure how well a company is finding those opportunities.

•Valuation. You can't afford to pay too much for even the best companies. Earnings multiples are simple, but using normalized figures gives you a sense of how valuation fits into a longer-term context.

•Dividends. Investors are demanding tangible proof of profits, and there's nothing more tangible than getting a check every three months. Companies with solid dividends and strong commitments to increasing payouts treat shareholders well.

With those factors in mind, let's take a closer look at Las Vegas Sands.

Factor

 What We Want to See

 Actual

 Pass or Fail?

Growth

 5-Year Annual Revenue Growth > 15%

 29.1%

 pass

  1-Year Revenue Growth > 12%

 23.5%

 pass

Margins

 Gross Margin > 35%

 38.6%

 pass

  Net Margin > 15%

 (1.6%)

 fail

Balance Sheet

 Debt to Equity < 50%

 164.8%

 fail

  Current Ratio > 1.3

 1.86

 pass

Opportunities

 Return on Equity > 15%

 (1.6%)

 fail

Valuation

 Normalized P/E < 20

 297.44

 fail

Dividends

 Current Yield > 2%

 0%

 fail

  5-Year Dividend Growth > 10%

 0%

 fail

       

  Total Score

   4 out of 10

Source: Capital IQ, a division of Standard and Poor's. Total score = number of passes.

A score of 4 for Las Vegas Sands isn't perfect, but it shows that the casino company has more going for it than many people think. Two years ago, the credit crunch had many believing that Las Vegas Sands would drown in its own debt. It's now the biggest casino stock by market cap.

To put its score in perspective, though, you have to look at other casino competitors. Wynn Resorts (Nasdaq: WYNN) has seen faster growth and pays a modest dividend, but it has an equally high valuation and a significant debt load. MGM Resorts (NYSE: MGM) has much greater debt problems, and unlike Wynn and Las Vegas Sands, MGM hasn't been able to start paying down its debt. And even though you'll find better valuations from Ameristar Casinos (Nasdaq: ASCA) and similar locally oriented non-Vegas casino competitors, you won't escape the debt that's responsible for so many problems Las Vegas Sands has faced.

From the huge rebound in its stock price, investors clearly believe that Las Vegas Sands will climb out of the hole it's dug for itself. But if you buy the casino company's shares, you'll have to be patient, because the process could take a long, long time.

Keep searching

No stock is a sure thing, but some stocks are a lot closer to perfect than others. By looking for the perfect stock, you'll go a long way toward improving your investing prowess and learning how to separate out the best investments from the rest.