This Day On The Street
Continue to site
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

'Bricks and Mortar' Portfolio Posts Big Gains

Once its three casinos are open, Melco will be a major player in the Macau market, where growth shows no signs of slowing. The stock looks quite reasonable today at around $19; however, all Macau casino stocks could pull back soon given their tremendous runs lately.

Starwood (Own)

A U.S. recession, which some economists fear is looming, would no doubt be bad news for the hotel industry. Nonetheless, Starwood's strong international brand expansion opportunities remain compelling.

If the company can achieve revenue growth of 7% per year, and margins continue to expand from pricing power, then I calculate the stock is worth around $70 using a discounted cash flow model. Taking into account share buybacks or takeover premiums could lift that price target further.

Blackstone Group's (BX) agreement to acquire rival Hilton (HLT - Get Report) spurred hopes of a Starwood buyout, but the takeout premium has since left the stock because of credit-market worries. But at around $62, the stock is very attractive.

Brookfield Properties (Own)

At around $26, Brookfield currently trades at 15 times next year's funds from operations per share, a proxy for commercial real estate cash flow. Analysts project the office-building owner will record FFO of $1.67 per share in 2008.

Given that analysts expect 6% annual earnings growth over the next five years, the stock is reasonably priced today and likely trades at a discount to the private market value of its real estate, much of which is located in the hot New York City market.

Office rents remain strong across the country. Absent a substantial national recession, Brookfield's portfolio should continue to perform well.

Penn National and Hilton Hotels (Own)

Both Penn National Gaming (PENN) and Hilton have agreed to private-equity takeout deals. Hilton's deal is expected to close later this year, at which point I'll take the stock out of the mock portfolio.
3 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
BPO $20.52 0.00%
RYL $40.83 0.67%
HOT $81.88 0.00%
HLT $22.05 0.00%
MPEL $14.80 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs