Las Vegas Sands (LVS) - Get Las Vegas Sands Corp. (LVS) Report has built a firm investor base over the past two-plus years, as the stock has gained 277% since its December 2004 IPO. But with the stock down 28.19% from its January closing high of $108.59 after finishing at $77.97 Tuesday, shareholders must feel lately that they've fallen into a sinkhole.

The company owns the Venetian casino on the Las Vegas Strip, in addition to the Sands Expo and Convention Center in the desert hot spot. Las Vegas Sands is also considered one of the few pure plays on Macau, the wildly popular Chinese gaming island, as its Sands-branded location was the first U.S.-owned casino in the area.

With that in mind, I'm here to answer readers' questions: Should you buy it? Is Las Vegas Sands attractive to buy at current levels, or are investors better off placing their next market bet elsewhere?

The latest decline in the stock came after the company posted first-quarter results May 2. The company earned 32 cents a share, a penny better than expected, and revenue increased 18% year over year to $628.2 million, which also came in $8.6 million ahead of expectations. That said, margins in Macau unexpectedly fell under 30% for the first quarter ever, which spooked investors.

The company is looking to expand its presence in Macau with a Venetian-brand casino, which will be the largest on the island, expected to open in August. Las Vegas Sands also completed building the Palazzo casino recently, which will be adjacent to the original Venetian on the Strip and is expected to open in December.

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As a result, the consensus analyst estimate is for earnings to grow 84% in 2008 to $2.67 a share, on top of just 2% year-over-year profit improvement expected in 2007.

With these new locations possibly representing a light at the end of the tunnel, Las Vegas Sands received an upgrade Tuesday from BMO Capital Markets analyst Jeffrey Logsdon, who boosted his rating to outperform from market perform, citing valuation. Stifel Nicolaus upgraded LVS on May 8, to buy from hold.

In addition to the improving analyst sentiment, two insiders have bought the stock on the open market this month. Directors Andrew Heyer and Irwin Siegel have purchased a total of 6,000 shares, providing a half-million dollar vote of confidence that the stock may have bottomed for the time being.

Before making any investment decision about Las Vegas Sands, investors should know that CEO and Chairman Sheldon Adelson owns about 69% of the total shares outstanding.

Even after its recent pullback, it's difficult to label Las Vegas Sands as an inexpensive stock. At current levels, the company is still valued at nearly 30 times expected 2008 earnings of $2.67 a share.

And the stock also has continued to slide in the middle of this record stock market rally.

Las Vegas Sands' new properties give the company attractive long-term growth potential, but the stock has few potential catalysts before the Venetian Macau opening in August.

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With that in mind, at current levels, readers should wait another two months and consider the shares closer to the opening in Macau. But if the shares fall near $70 in the meantime, it's time to consider getting in.

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David Peltier is a research associate at In keeping with TSC's editorial policy, he doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Peltier appreciates your feedback;

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