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Las Vegas Sands Corp. Message Board

  • bjspokanimal bjspokanimal Apr 25, 2012 5:40 PM Flag

    It's all about using the best numbers to...

    ... arrive at the best possible picture of how the company is doing.

    When FASB established GAAP accounting, the securities industry decided that the non-GAAP number was more meaningful, so over time, the "headline" number has evolved to be the non-GAAP number. It's still good to evaluate the reason for the difference between the 2, but Non-GAAP is the standardized number used by CFAs.

    Similarly, you get more meaning in gaming by using a "normalized" number, which eliminates casino luck (or lack thereof) to arrive at a better number for evaluating the company's operational performance. Same store sales, book-to-bill ratios, etc. are other means by which to evaluate operational performance.

    It's also advisable in industries with high, depreciable cap-ex to emphasize EBITDA and cash-flow more relative to EPS than you do with lower, cap-ex industries like retail or software or services. That is especially true when fixed assets (like Venetian) are actually appreciating in value, even though they are being depreciated on the books.

    Hope this helps...


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    • The "birthing" phase of Templeton's mantra was back in the days when they had stopped constructing Cotai Central, were struggling to stay current on their debt covenants, and everybody was using the BK word.

      The "growth" phase was the days of high percentage gains and "P/E expansion" in the absence of anticipate, but not yet announced EPS and EBITDA improvements.

      The current "mature" phase is characterized as good, continued growth with an increasingly moderating P/E that allows the 200-day moving average to steadily rise but keeps the PEG ratio decisively below 1.0.

      The "euphora" phase will see the PEG ratio rise above 1.0 and will be especially dangerous if there appear to be future impedements to LVS's growth prospects.


    • Agree with the need for patience here. While it may take some time for the positive effects of any asset sale to entice new value/dividend-seeking investors, would this, in return suggest that we would have entered the "mature" phase of the LVS bull market?
      Either way, it would be interesting to follow Yahoo's stock performance after it's just announced sale of it's 50% stake of it's non-core Ali Baba holdings.

    • The only thing going down in Macau is unemployment.

    • and growing.

    • ... while I do think they are a positive aspect of the company's business strategy, I'm not sure I support the notion that the announcement of such a sale would be an immediate boon for the stock.

      The reason is because asset sales are rarely seen on the street as being as fundamental to the health of a company as fundamental operating metrics like revenues, EBITDA and EPS are. Investors like "operational momentum" and the projection of future operational momentum, whereas asset sales are looked at as one-time items which, once announced, are history in many people's eyes.

      Among those of us who value that strategy for it's potential to recycle capital and build the empire, the question begs: when do we enjoy the value of that strategy via the stock price?

      My answer to that would be... patience. After such an asset sale comes a bolstered balance sheet, which could lead to new development announcements, stock buybacks, dividends debt reductions and credit upgrades from S&P, moodys et-al. It's those kinds of things that are the result of asset sales... and those things support and grow the stock over time by attracting a broader audience of investors who value those things...

      ... like dividend seekers, who shunned LVS until it recently became an "income" investment more to their liking.


    • ... non-GAAP... and not "normalized".

      It was a 10 cent beat.


    • Spok, so any explanation as to why the stock reacted the way it did AH if we beat the comparable number by .10?

      No idea to know what the analyst non adjusted number would have been correct?

      • 1 Reply to orthokneepa
      • ... 55 cents... and the stock did extraordinarly well in the months that followed that announcement.

        I'm not too keen on guessing why investors react the way they do, but I'd say that given the past few months, and the strong regular session we had today, the stock is priced well relative to last Christmas, when Cotai Central was also a known entity, and the initial indications of the VIP initiative were starting to surface.

        Q4 was a disappointment, and the stock rose... Q1 was a solid number, and the stock is down a tad...

        ... it's all just trading noise... the trend is what matters and it matches apple over the past couple of years.


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