NEW YORK (TheStreet) -- Shares of Las Vegas Sands (LVS) are falling, lower by 1.02% to $52.36 on very heavy volume in late afternoon trading Wednesday, as Macau-related casino stocks are sinking on reports that China is cracking down on illegal activities in the Macau gambling district, Bloomberg reports.
China will begin cracking down on illicit money channeled through Macau, the only region in China where casinos are legal, according to Bloomberg.
The Chinese Economic Crimes Investigation Bureau will begin monitoring all money transfers electronically that use the China UnionPay payment system, according to the South China Sea Post.
Macau has curbed money flows to the world's largest gambling hub by restricting the use of UnionPay's debit cards at casinos, as well as hand-held card swipers within resorts due to concerns over illegal funds being taken out of the mainland into Macau, Bloomberg noted.
About 15.47 million shares of Las Vegas Sands traded hands as of 3:44 p.m., compared to its average volume of about 5.99 million shares a day.
Separately, TheStreet Ratings team rates LAS VEGAS SANDS CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate LAS VEGAS SANDS CORP (LVS) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, expanding profit margins, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- LAS VEGAS SANDS CORP has improved earnings per share by 9.2% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, LAS VEGAS SANDS CORP increased its bottom line by earning $2.79 versus $1.85 in the prior year. This year, the market expects an improvement in earnings ($3.53 versus $2.79).
- 46.68% is the gross profit margin for LAS VEGAS SANDS CORP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 19.01% is above that of the industry average.
- Net operating cash flow has slightly increased to $1,226.65 million or 7.92% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -17.67%.
- Even though the current debt-to-equity ratio is 1.38, it is still below the industry average, suggesting that this level of debt is acceptable within the Hotels, Restaurants & Leisure industry. Despite the fact that LVS's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.78 is high and demonstrates strong liquidity.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. In comparison to other companies in the Hotels, Restaurants & Leisure industry and the overall market on the basis of return on equity, LAS VEGAS SANDS CORP has underperformed in comparison with the industry average, but has greatly exceeded that of the S&P 500.
- You can view the full analysis from the report here: LVS Ratings Report