Las Vegas Sands Shares Get Grinded

Las Vegas Sands has a plethora of development opportunities set to be delivered over the next five years in Las Vegas and Macau, including malls, casinos, hotels and residential units. The company also is among the contenders for the first-ever gaming license to be granted by the Singapore government later this year.

As well, it doesn't appear that any Wall Street analysts are currently providing any added value for the company's 1,300 acres of land on Hengqin Island, which is near Macau. The Chinese government provided the land for free (choosing instead to tax it down the road). The agreement is subject to conditional approval by mainland Beijing. Once the approval becomes final, analysts will have to start plugging in values for that land.

The company, for its part, has said it could use the land for as much as 20 million square feet of luxury residential space -- representing future revenue in the tens of billions of dollars by the company's account, Klatzkin says.

Klatzkin currently assumes no future earnings from that project, but still estimates that the company will report 2008 EBITDA of $2.1 billion, up from $586 million in 2005. About 67% of the company's 2008 EBITDA will come from Macau, Klatzkin says.

According to Thomson First Call, analysts, on average, expect the company's earnings per share to grow by 15% this year and 43% in 2007.

Granted, the Publishing & Broadcasting and Melco IPO, if it happens, will be a pure-play on Macau, and the fact that it's trading in the U.S. market means it will reach a far wider investor audience than any Australian or Hong Kong-based companies. But at the same time, the recent Las Vegas Sands pullback may provide an attractive entry point on the stock.

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