This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Casinos Run the Table

The Sands IPO likely sparked interest in other big casino names, according to Matt Quinn, senior lodging and gaming analyst at Zack's Investment Research. The company's casino in the Chinese enclave of Macao highlighted broader investor optimism about casino opportunities across the Pacific, Quinn said. (Zack's neither does nor seeks to do business with companies it covers, and Quinn owns no shares of companies he covers.)

"People are starting to realize there's strong growth potential in Macao," he said. "Casino companies can benefit from building there. They get a chance to build their brands in Asian markets and hopefully get Asian customers to come over to the U.S."

In a filing with the Securities and Exchange Commission, Sands said net income from its Macao casino, which opened in May, was $60.7 million during the third quarter. The company also plans to build a Venetian-branded resort in Macao by 2008.

MGM Mirage and Wynn also have plans for Macao casinos, and Merrill Lynch's Anders cited MGM Mirage's long-term prospects in Macao as a factor behind his price target upgrade.

Although Quinn is also bullish on the future of Las Vegas and Macao gaming, he's more cautious on the potential for robust casino stock gains in the near term. "I don't see a lot of upside for them at this point," he said. "They looked pretty reasonably valued." Quinn has holds on all the stocks he covers in the large-cap gaming sector, including MGM Mirage, Caesars, Harrah's and Mandalay.

The stocks are likely to trade sideways for the next three to six months, but MGM Mirage and Harrah's could see additional upside after that, as benefits from their big mergers begin to appear, Quinn added.

Despite the huge gains in Las Vegas Sands since its IPO, Quinn contends its multiple is not out of whack with the market. At recent levels, the company's enterprise value-to-EBITDA multiple is about 9, which is comparable to Aztar Corp. (AZR) and Boyd Gaming (BYD), both of which have Vegas properties similar to Sands.

As originally published, this story contained an error. Please see Corrections and Clarifications
2 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,959.44 +154.64 0.87%
S&P 500 2,078.54 +7.89 0.38%
NASDAQ 4,781.4240 +16.0440 0.34%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs