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.Melco PBL ( MPEL) shares jumped 13% Friday after being slammed earlier this week, when rumors of a problem with the Macau casino owner's credit facility weighed on the stock. Melco's second-quarter results, released Friday, were weak, as expected, because of the delayed opening of VIP game rooms at the company's first casino, Crown Macau. However, the company -- which I've picked as a buy for my Bricks and Mortar mock portfolio -- reported positive July and August trends for the Crown, and management did its best to soothe investors about the credit facility fears. Melco said average daily VIP rolling chip volume -- a key Macau operating statistic -- was $20 million in the second quarter. The volume more than doubled to $44 million in July and has improved another 25% to $55 million since the beginning of August. For the second quarter, Melco reported a loss of $69.2 million, or 6 cents a share, widened a loss of $5.2 million, or 1 cent a share, a year earlier. Heavy property-related expenses dragged down results. The period marked the first quarter that included any casino results, since the Crown property opened in May. Thus revenue for the quarter soared to $45.1 million from $5.5 million a year earlier. Melco said Crown's market share of total gaming revenue in Macau was 1.7% in May, 2.7% in June, and 4.9% in July. In August, the share rose to 7%, management said on the company's conference call.
Home Solutions PlungesIn other Bricks and Mortar mock portfolio news, Home Solutions of America ( HSOA) shares were sinking 22% Friday to $3.16. Earlier this week, Home Solutions
|Bricks and Mortar Portfolio |
A Look at How Nicholas Yulico's Picks Have Performed
|Rating Date||Price at Rating||Rating||Current Price*||Return**|
|Brookfield Properties (BPO)||1/23/2007||$28.67||Own||$22.47||-21.6%|
|Global Real Estate ETF (RWX)||1/23/2007||$64||Own||$56.35||-12.0%|
|Penn National (PENN)||2/6/2007||$45.56||Own||$55.49||21.8%|
|Melco PBL (MPEL)||3/12/2007||$15.46||Own||$10.10||-34.7%|
|Home Solutions of America (HSOA)||4/24/2007||$4.98||Flag||$4.05||18.7%|
|Average Total Return, Unweighted||8.9%|
|Close At Start of Portfolio||Current Value|
|U.S. MSCI REIT Index||1140.36||924.71||-18.9%|
|*(8/16/07 closing prices) |
**For "flagged" stocks, a drop in price is tracked as a positive for the portfolio, and a rise in price is a negative.