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Above: Singapore’s bubbling recovery reduces the money burning rate of Las Vegas Sands, related to Macau.
A departure from our same old prologue of quotations from the demonstrated wisdom of wonderful minds, we recommend our insertion of such a remarkable quote, “It is not the beginning of the end, but the end of the beginning,” into the name of this article. It was, of course, uttered through one of the giant figures of the twentieth century, British Prime Minister Sir Winston Churchill. He is a private hero and a man of great brilliance to navigate the paths of war, peace and life. He understood that truth is made of nuances.
Here is the full quote from Churchill after the first Allied victory over the Nazi war apparatus at the Battle of El Alamein in November 1942. It was no small feat to defeat the “desert fox”, the German general Erwin Rommel. The excitement enveloped England tired of defeat. But Churchill, wiser than the greatest men, hesitated; Not yet, he noted, not yet.
Here is the full quote:
“Now, this is not the end. This is not even the beginning of the end. But that’s the end of the beginning. . . “
To me, it’s a precise expression of where, in our little gaming world, the valuation of Las Vegas Sands Corp. is lately. (NYSE: LVS). And in his own way, apologizing to Churchill’s real-world reminiscence, he expresses my conviction stronger than ever that LVS’s share price is about to take a real turn. And in my opinion, it goes up from here. In the first two quarters of 2023. This is the end of a long start that began in 2020, when covid first hit.
Data via YCharts
I have stated my previous mea culpas for past bad assumptions about the recovery path of LVS stocks most commonly trapped in a dead trading range. My mistake was that Beijing, with its economy crushed by zero tolerance, would reluctantly become a rational actor here. and slowly reopen travel in and out of China from province to province. This concept was born out of my long delight in the game box in Asia, where I learned that no one leaves a penny on the table, even communists.
Hence my feeling that relief would come sooner rather than later and that LVS would be a disproportionate beneficiary of Beijing’s reopened policy. After all, LVS has 12 000 rooms in Macau. above, I see a steady improvement in LVS customers, feeling a real end of the beginning. As of now, I see a developing margin of protection in LVS shares at their current price. Call it a new beginning.
By context:
No fly on any wall reliably reported here whether Goldstein and his team may have quietly opposed the sale. her late husband’s purpose in Asia. La key is the long-term Adelson Foundation.
Now, just two years after Adelson’s death, it turns out that Mr. Market has yet to see a boost for LVS that suggests they’re getting closer to some sort of Asian deal. There have also been no movement towards digital, control has been targeting it for more than a year. (This might be the most productive resolution of all: staying away from bleeding cash sports betting is rarely the worst way to get through right now. )
Thailand’s special legislative committee has been reading the legalization of casinos for several years. He spoke out in favor of casinos. Although the regulatory and administrative infrastructure of the gambling industry still exists there, Thailand’s demographics, geography and economy are obviously not an issue.
Some of our colleagues in Las Vegas who had been to Adelson told me that if he were alive, a deal would have been made long ago in a third Asian country.
Conclusion on the sequential LVS “defeats” that hindered stock recovery: Control would possibly have many clever reasons to slow down its next big move, but given the functionality of the stocks, it would seem that there are few believers willing to do so. buy an LVS recovery history.
On a macro basis, with small signs of recovery appearing, LVS remains underrated. Therefore, now the beginning of the end of the fall of LVS shares could be near. This has gone up since the summer but is still behind in its outlook in our opinion.
We now move on to the end of the beginning: it says BUY
Cavalry is on its way, led by LVS’s robust functionality on its Marina Bay Sands property in Singapore. It is one of Asia’s most lucrative gaming markets, completely free of covid headwinds, a strong local market and growth in ASEAN. sightseeing and VIP. La functionality of the MBS contributed greatly to reducing the group’s losses. The company’s net loss for 3Q22 in ongoing operations is $380 million compared to $594 million in 2021.
Macau: This market remains hostage to the zero-tolerance policy. However, our resources believe that tension has built up within Beijing’s top councils to at least moderate some of the protocols as the economy heads towards crisis. So, at best, they moved slightly during the quarantine and issued a statement about doubling down on fundamental policy. Our Asian affiliates believe that Xi Jinping is not wasted in the face of this ongoing macroeconomic crisis.
They think he’s waiting for a facial rescue of a primary foreign body, like the WHO, which would consider some sort of moderating support for some reopenings. “Xi would take advantage of the possibility of hiding behind a giant foreign group. It’s the best way to save face to start a genuine relaxation of travel bans,” a Hong Kong journalist told us last week. “It’s a puzzle, but it wouldn’t be a mistake to recommend that in the spring, long after any increased winter, we might well see mass travel reopenings in China. “
Even Beijing’s timid tug-of-war vaguely suggesting the moderation would likely be in the way it moved sector stocks a bit last week.
Meanwhile, the central fact of all this lies in an assessment of the liquidity of the industry in Macau, assuming at worst that Beijing remains locked into a paralyzed state of zero tolerance.
The total cash/liquidity equivalent of the six Macau distributors is approximately $70 billion. The industry is generating cash at a rate of about $1 billion a year. As cheap debt maturities increase, this may start to scare major players. But LVS is well placed to last. Here is evidence of maintaining a resilient balance:
Cash: $5. 84 billion
Cash consistent with share: $7. 64
Leveraged CTF: $2. 22 billion
Long-term debt: $15. 2 billion.
Current ratio: 1. 83. This is healthy and will remain so for the duration of the draconian maximum component of the covid zero tolerance policy. Our view is that even if there is no significant moderation of covid policy until 2Q23, LVS would not face a liquidity crisis. In fact, betting that there will be some restraint, and that this resolution would boost LVS shares into a stream of positive news, makes sense here.
Publisher Price: $43. 22. Inventory hit a 2022 low last June at $31. It’s one of the inventories that lives and dies as the news unfolds, many of them crazy, some downright crazy.
MBS files
Above: Marina Bay Sands’ positive money will become even bigger when the expansion plan adds more rooms, rides and games in 3 years.
Case in point: Last month, we noticed 4 articles in primary monetary publications that connected Xi Jinping’s “re-election” as a massive headwind for LVS/Macau. The reasoning: that Xi was the unwavering force of the zero-tolerance policy and that he probably was to keep it alive in the long run. Making this connection assumes that Xi has been “re-elected. “What? Did anyone ever doubt for a moment that Xi and his henchmen would remain in force?
What did the journalist and analyst expect? After a long and bitter drive for power, President Xi Jinping was re-elected by a narrow majority ???? Array. . . The world knew the solution was Xi’s re-election. Communist dictatorship.
But this is evident from the kind of inept news flow that has accompanied all Macau’s moves for years. It follows dozens and dozens of news and reviews that we have followed for years and that also belong to the land of desperate imaginary clickbaits in the money market. Media. The idea that Adelson’s monetary and political default by former President Trump would result in LVS being punished for not renewing its concession was a recurring theme in many monetary news in the sector.
Now, we are probably a few weeks away from what is likely to be confirmation through the Macau government of the six existing licensees of their 10-year renewed licensees. This fact is one of the parts of what we see as the slow but inevitable turn in the flow of positive news that will play a role in the continued recovery of LVS stocks. Obviously, Xi Jinping has much more fish to fry than the long-term game of the small enclave of Macau.
For our claim that the time is right for an LVS hotspot, we have this bullish case:
Singapore continues to provide ballast against the worst-case bleeding of money for its parent company.
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This article written by
For 30 years, I have held senior vice president and executive vice president in key hotel and casino operations, adding Caesars, Ballys, Trump Taj Mahal, and have performed consulting duties for many others in the United States, adding the Mohegan Sun Native American assets in Connecticut. I also did special projects for Caesars Palace in Las Vegas. I was the founder and editor of Gaming Business Magazine, the first publication covering the gaming industry and have written a lot about the industry.
Disclosure: I have/do not hold any stock, option or derivative positions in any of the discussed corporations, and do not intend to initiate such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I don’t get any refunds for this (other than Seeking Alpha). I don’t have any business dating a company whose actions are discussed in this article.