Take the Long View on Melco

Editor's note: "Bricks and Mortar" is a series of columns written by real estate reporter Nicholas Yulico meant to help TheStreet.com readers generate real estate and gaming-related stock ideas.

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Macau casino operator Melco PBL(MPEL Quote) has been battered this week, but nervous investors should ignore the damage and look longer term.

The Macau casino market is growing at a tremendous rate, and Melco's casinos will eventually take a good chunk of these profits.

At the current growth rate, the entire Macau market will have $10 billion of annual revenue by year's end, compared to just under $7 billion last year, when the Chinese region surpassed Las Vegas as the largest gambling destination in the world.

Still, Melco shares have fallen about 12% this week, with the stock hitting a fresh 52-week low of $14.12. All this red is painful for investors, but I still think the stock is a buy, for reasons I laid out here and here

On Tuesday, Melco reported a $27 million loss in for the first quarter, but the results don't really matter, since they don't include contributions from the company's first casino. But Melco management could have done a better job on its earnings call soothing investors, who have been jittery since the weekend opening of the casino presented some short-term issues .

The Crown Macau opened to large crowds, but Melco's stock sold off because the company failed to get all its tables for high-rollers up and running in time for the opening. These tables are important, since the Crown will compete with Wynn Resorts'(WYNN Quote) Macau casino to become the leading high-roller gambling destination in Asia.