Most of the names moving up sharply today we have quite good exposure to, but one of the names at the bottom of the portfolio that is ramping is Las Vegas Sands (LVS). When I see a stock move like this I try to look back at the chart and see if I could of done anything different but frankly, this was a stock that had been going sideways for weeks, and then Friday it fell apart - breaking support. Our position was small as we were waiting to see how it would resolve this range bound action, and Friday's action confirmed that bias. In fact the chart, as of Friday, would call for (a) selling or (b) shorting.
But there is no accounting for the lemming action that comes with analysts ... LVS not only got 1 upgrade but Goldman Sachs restarted coverage on the name. Notwithstanding that the coverage was initiated with neutral (Wall Street speak for sell!) - we have a huge move up on good sized volume and away she goes. Another destruction of the bears.
- Shares of casino operators with properties in Macau climbed Monday as the latest reports suggest gaming revenue for casinos in the Chinese enclave rose 48 percent last month. Gaming revenue has steadily improved in Macau since last summer, which has helped casino operators like Las Vegas Sands Corp., MGM Mirage and Wynn Resorts Ltd. as they continue to battle sluggish gaming results in the U.S. Domestic gamblers have pulled back on their spending during the recession, often gambling less, taking shorter trips and frequenting local casinos in attempts to save money.
- Robert LaFleur of Susquehanna Financial Group said in a client note that the Macau gaming revenue improvement had been expected because 2008 was hit harder by visa restrictions and the global economic downturn during the latter part of the year. Macau is the only place in China where gambling is legal.
- Separately, Robin Farley of UBS upgraded Las Vegas Sands to Buy from Neutral, saying the casino operator should benefit from the Macau gaming market, which she predicts will grow more than 18 percent year over year in 2010. Farley boosted Las Vegas Sands' price target to $20 from $19.
- Meanwhile, Goldman Sachs' Steven Kent reinstated coverage for the Sheldon Adelson-led Las Vegas Sands with a Neutral rating, citing its recent Sands China initial public offering. Kent believes Macau is currently the casino operator's best component, as Las Vegas will likely remain challenging this year due to new supply coming online and ongoing economic concerns. Kent provided a $16.25 price target for Las Vegas Sands.
Long Las Vegas Sands in fund; no personal position