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  • jaquecroissant jaquecroissant Apr 18, 2012 12:50 PM Flag

    win win win

    WYNN didn't make the cut because the D/C is 60%. LVS didn't make it either w/ D/C of 55%. I use a cutoff of 50%. I just don't like companies with a lot of debt.

    The 5yr growth factors were lower than I like as well. Recent numbers are good though.

    I'm not saying my screen is perfect by any means. This is just how I like to look for companies.

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    • D/C meaning debt to cash?

      I could see a 50% cutoff rate eliminating a lot of good companies.

      Not that I'm a big fan of debt but in my mind, debt to equity a little more important.

      Of course looming maturities always a concern.

      That said, gaming stocks seem richly valued so i would agree.

      Did well shorting LVS way back when it was in trouble and surprised to see it recover so well but have not followed it since.

      Gaming just not much future for much growth in the US IMO but Macau another question.

      the Chinese love to gamble no question but then I wonder about what else they might have higher on their list of priorities.

      Thinking indoor plumbing, lighting, and appliances ...andmaybe transportation etc before the trip to Macau lol.

      • 2 Replies to winsabokk
      • Wins... that 50% D/C ratio eliminates allot of good companies. But I have to admit that I seem to favor buying stocks of companies with no debt. That said, it does depend on how the debt is structured. Geeze, at today's interest rates, why not borrow some money and put it to work. Actually seems like a smart idea.

        As for gaming stocks, many gaming stocks are are richly valued currently... I suppose a good case can be made for lumping gaming stocks in with story stocks.... no doubt.

        Now, as for the Chinese having higher priorities than gambling, ...not to worry. The average Chinese likely does have the priorities more in the order that you described.

        HOWEVER,
        Las Vegas has about 140 thousand hotel rooms with a US population of 313 Million people, and there are more rooms in competition against Las Vegas counting other cities in NV, NJ, all the riverboat gambling and Indian Reservation Casino gaming.

        Macau has about 60 thousand hotel rooms, so just counting hotel rooms in Las Vegas alone, Las Vegas Hotel rooms outnumber Macau more than two to one.
        With a Chinese population of about 1.5 billion people, the top 5% of the richest Chinese gives Macau 75 million people to keep the Casinos going strong.
        And China is not the only Asian country to draw from.

        I like the odds of making money in Macau.

      • D/C means debt/capital. Yes debt to equity is another way to say it.
        http://www.investopedia.com/terms/d/debt-to-capitalratio.asp#axzz1sxnF8iUF

        No doubt a lot of larger cyclical/industrial companies might have have levels of debt. CAT comes to mind.

        Doesn't mean you can't make money with them. It's just how I play it.

 
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