Now trading well below the cost of Stiritz, Pelz, and Chapma's positions... what a gift courtesy NUS...
No current position, but this is a compelling trade at $48.70 today.
If they were to announce they are writing off the entire investment there and abandoning the venue then the current stock price would make some sense. We don;t think that is happening... LOL
We have yet to see a single published estimate include revenue for Manila during 4Q. Only Bain and two others have any kind of number of size in there estimates for 2014... in this "Chicken Little and the Sky is Falling" environment for the Asian gaming stocks, that is not surprising. Analysts can be wrong and not get fired, but they can not be wrong alone and MPEL's comments have made it easy for analysts to play turtle: last Q Ho said ~"We are going to get it right and be 100% ready before we open because we have learned the hard way opening our own properties and watching others that opening early is a bad idea for customer service."
Still, based on Bain's numbers for COD Manila, a number he published BEFORE the recent bump up in budget once they had Hyatt signed on for the third hotel in the complex at COD Manila, they were predicated on ROIC of about half the current run rate for MPEL overall. We don;t think MPEL's BOD or Lawrence plan to have that kind of performance dragging down ROIC for the Company, even if it takes say a year or even 18 months to get it up and running the way they must be planning.
Our modeled range starts below Bain's implied ROIC (on the new capital allocation), but gets to 40% above his number for CY15 on the optimistic case.
Given the stock's dismal performance of late, and understanding the BOD is not about short term outcomes aside, Ho really needs to share the updated timeline for opening COD Manila tomorrow... and they need to give the weak sauce sell siders some input too... otherwise, only Bain has a clue about what is coming.
VIP runs 3% before operator commissions... MPEL had 36% hold on mass/premium mass table games (mostly baccarat as you know) last Q -- with no commissions owing on that table play. WYNN just reported 45% as if that would be there forever... that is unsustainably high in our view -- even Shel would not suggest that will win rate hold up (dual pun intended for fun) over time.
LOL what that mytek99 moron wrote on that alias to demonstrate his stupidity...
Anyone paying attention to our posts over the last couple of years knows we've had no loss on HLF in dozens of trades (long and short) or on the big core at $38 which we sold out at $80. Based on today's NUS butch dragging dowen HLF though, it is likely getting close to another fun trade zone for those who like spec trades. Insiders bought a bunch in the open market last week.
As for MPEL, we own the core split about 60/40 at sub $13 and between $21 and 23, and we now have an even bigger position we think of as C2 on below $33.40. We've also done MANY trades and hedges here going back to 2010 as longtimers know... Most of those were posted as we went.
Now as for morons who should end the misery for themselves and those around them? We would not wish ill will on anyone, not even complete dufus trying to dis us with stupidity.
refresher course for the nubs shorting this today.
and as i wrote a few months ago, remember that PIMCO began buying during 1Q, so they liked the stock between $38 and $45.
So they must love the stock down here and are likely buying heavy 2Q based on their comments this week. LOL
NUS over-stepped authorized product distribution... and they are being slain for it. THAT is a great short!
HLF has been and is being careful to make friends there and follow all the rules while dotting the "i's and crossing the "t's". Notice no regulatory action has headhunted them there? LOL
China will soon enough be HLF largest market. Almost time to go back in with more than peanuts after a few lucky in/out same day trades of late.
lots of box hedging this week matrix... we just pulled our paired trades on MGM and LVS as MPEL's revs may be flattish, but MPEL's VIP is going to be down more like 40% or so as the mix is now running closer to 80%+ mass/premium mass.
Again, the drop in VIP 2Q in Macau is largely accounted for by LVS and MPEL alone emphasizing mass/premium mass play mix. One day soon more than just sector pm (and those comprehending the story here) will figure it out and this ignorant valuation on MPEL shares will be over with everyone wondering why they didn't buy more while the shares were so stupid cheap.
Same as it was in october 2012 and again last July...
what i have said following all of the noise and bs hurled at the sector is (targeting to see Dec Q results in early Feb not year end of late), getting to $40 seems about like getting to $30 did last July when this stock was at $21. When MPEL hit $30 last fall, we said we thought it could get to $35 or even 40 by EOY. As you know it got to $39.70 or so.
Again, the first time we set out $50 as the upside target for this stock several analysts and posters here were talking about numbers like $58, $60-65 and even $75. I wrote those all seemed a bit too optimistic given where things were at the time, but the stock was already at $40, too, and soon thereafter double topped at $45.
If things recover in Macau for 2H14 as Lawrence said last CC with his 15% GGR estimate for Macau (in MPEL's case, almost entirely focused on mass/premium mass in Macau for the 2H14) and Steve suggests is already happening (though perhaps still slow at MGM based on Murren's update this week LOL), then we think $40 is coming up quickly -- again, about like $30 for MPEL by 12/31/13 felt 12 months ago with the stock at $21.
As for $50? We definitely think that is still attainable, though when we said it 7 months ago the entire sellside had numbers at or above that level and we were at the low. What is needed for that? The buyside needs to understand that China's economy is not collp[asing, nor is wealthy Chinese patronage to macau or related GR, even if VIP numbers are flattish into EOY as the conversion to prmeium mass is clearly the undercurrent at all of the U.S. listed companies -- again, led by MPEL.
All that said, do your own thinking instead of relying on anyone else's thoughts, especially the idiots calling themselves "journalists" and analysts in this sector.
p.s. Good to see the airlines, banks and med stocks bounce a bit. down 8/10 days is WAY oversold down here... and see my peer group post if you missed it. MPEL is painted with the group brush today, but CC is tomorrow
So wait... does anyone know how many Nigerian healthcare workers are high end Macau gamers?
Have a look at the airlines... the Asian bird flu hurt that sector 10 years ago, and seek medical advice if meaningful to you personally, but this ebola requires fluid transmission (don't treat anyone with ebola if you have an open wound, but fret not about aerosol effects that bird flu (like any airborne flu). The airline stock collapse seems to be a cooked goose in recent minutes... maybe more than just us are adding to airline positions while they are on sale too? LOL
As for the gaming companies, we think even LVS and MGM are oversold down here so we just finished covering in the hedge shorts paired with the MPEL long. As for MPEL, they report tomorrow, so those trying to retest (again) the recent low of $29.76 ought to be in a big hurry... and who is buying up all those shares being thrown out with the bathwater?
Get out those knuckleball mitts (again) if you have one and the risk tolerance... Steve already told us what one needs to know about Macau 2H14.
For MPEL, consensus revenues are down to flat for the Q... that would make sense if 60% of MPEL's rev stream was VIP and they had group ave table yields on their main and premium mass floors. LOL
So the "esteemed" (LOL) analyst group thinks MPEL is going to fare worse on macau revenue generation YOY than did LVS, WYNN and now MGM? That is um... unlikely in our view... but fun to see the JPM report suggesting the end of the Macau GR growth story because of the VIP influences of late, as if that is the end of anything at all. And how about the Zacks piece of work? IBD's "journalist" repeating his ignorance? Shuli raging on?
You know, if Macau VIP gaming revenue was going to zero (it is down to a mere 1/2 of $50b annual run rate currently LOL), then MPEL, who is well ahead of the group on locking down elite mass/premium mass franchise players, would fare better than its peers on adj ebitda... but don't tell any of the "analysts" or media filling their days and clients' mailboxes with Chicken Little pieces entitled "The Sky is Falling on Macau, and the Sun will Never Shine Again There" ... LOL
Those who have followed the sector going back almost exactly two years ago or more have seen this ridiculously lame "expert opinion" before... the street went to hold or sell ratings with MPEL at $12, LVS at $38, WYNN at $90, and MGM at $9. Longtimers will recall we couldn't believe it then either... not so much the stupidity-- this sector has always had weak analysts going back to Murren's time as a sellsider (which makes his dissing of analysts on the CC even funnier than most realize) -- but for the opportunity to get very long the shares on the cheap again.
On that note, PIMCO's guy was referencing MPEL was cheapest iun the group on adj eps... hey Pimco, do that math on ebitda and adj ebitda metrics... and consider that the adj ebitda run rate will be close to double present levels in little more than 2 years.
We'll pass on a detailed review as it rattles the cage of the yahoos focused only on LVS or WYNN or MGM or the older, slower growing HK listed companies, but here's a quick recap of what the three "other" U.S. listed companies have shared for the Q.
Consider the peers broadly to see they are generally improving in ebitda despite their specific weaknesses this ytd. LVS has shied away from VIP much like MPEL and also had very fat holds that are not sustainable or consistent with the haircut numbers carried into the CC by the street. Yes the properties are full and adr's are up, but not great and where is the prgoress to come since they suck at direct credit as amply shown... and Singapore is ok, too... just not fabulous as they had hoped. Surprised the stock didn't get set back a bit more than it has.
WYNN's VIP orientation is now morphing into a copy of MPEL's elite mass business plan, replete with Steve's tip of his hat to Lawrence as a "couple of years ahead of us" of late. And Steve no, we nor any other sophisticated pm thinks 45% mass/direct credit premium mass holds are sustainable, and we know you won't keep on sending your jet fleet after the Asian guys now that they are figuring out the central planners are not headhunting VIP tours or their players with all the noise bs now on fade.
As for MGM, good thing is that the blue hairs still pull slots and that the MCE business is alive and well (if maxing now) in Vegas, but for all of Murren's bs re coming clean on THEIR construction timeline concerns for THEIR properties, he really ought to mind his own problems when others do not have the same issues. MGM's 2Q numbers sucked in macau on VIP (50% of the business down 20% = down 10%) and was ok on mass (50% of the business up 40%= up 20% so blended to up 10% for the Q). The serous pm get it Murren, even if the media and "analysts" you made fun of as not even reading [SEC files] do not.
MPEL Q? 20% VIP down 20, 80% mass up 35%+ = -4 + 28 = up 24%? LOL
I posted about this until i realized the video was in the headlines, but I agree with your comments.
The best part is that the typically very conservative Pimco is now getting long equities but also involved in this sector internationally. When you consider they have arguably the most dialed in international research team in the business of capital management, it is less than obvious to realize the current discounting is premised on more than a temporary blip in gaming rev growth -- and Pimco obviously does not see it that way.
This guy interviewed doesn;t hve the details, but he got to some of the key points on capital, ROIC and adj ebitda... the research staff no doubt has it all right on BOTH phases (not just one) for MSC, Tower 5 at COD Cotai, COD Manila (not mentioned today), and increased dividends and buybacks coming down the road to japan.
Judging from your posts under messages, it is clear you know little about stocks generally -- and absolutely nothing about MPEL... just like Shuli Renn, the IBD tool, and this WSJ pseudo journalist who know nada about anything. You really ought to stick to growing coffee, chewing cocoa leaves, and bonging low grade reefer while the shorting the shitey stocks you wet yourself over.
This stock is going to mohawk, HAM, those stupid enough to short one of the best growth stories of this year and next... but then we whatever you do, stay short until after the earnings release this week... the F dufus crew at Zacks thinks MPEL is going to miss. LOL
and Steve isn't flying the junket crowd into Vegas this month... LOL
Looking forward to MPEL's update this week... MGM's mass numbers were solid for them... MPEL's should be best in group.
Ignoring that VIP has declined almost 20% yoy for Macau and that much of that "decline" actually sits in converted "premium mass" of the top venues these days, it is interesting to note that Steve said WYNN was picking up VIP in July and that MGM said that "political issues" in China are compressing VIP play in Macau.
Those differing perspectives are borne out in the july market share data for those two companies... WYNN grabbed an additional 1.7% of the overall GGR (i.e., incl VIP) while MGM saw its shares of Macau GGR drop by 1.5% of the market to only 8.8% in total.
In the context of MPEL (and LVS) fading intentionally away from VIP in Macau, essentially ceding that business to others ytd (having gone from 50/50 VIP and mass last year through June) to more like 80%+ mass and only ~20% VIP in MPEL's revenue mix, it is great news to see MPEL holding share above 12%, especially if Steve is correct that VIP is now ready to lift over the 2h14, however gently.
For the 2Q14, MGM's China adj ebitda was up 10.3% incl the $14M "rebranding" costs there. 10.3%...
During the first Q, despite MPEL's strategic shift away from VIP (which ran at over 50% of GGR last year but was down to less than 25% of MPEL's GGR during the March Q) MPEL's adj ebitda growth yoy was 31% -- THREE TIMES the growth rate seen at MGM for the June Q and done without any increase in Macau footprint.
MPEL continues to throttle back from VIP in Macau and will likely report that VIP comprised less than 20% of total GR during the June Q.
MGM's cc had several comments fun to chuckle about, but nothing to suggest the sky is falling on macau. LOL
just took off the 5k at 49.50 at 50.20... no need to piggy... we have no core here these days, but we'll trade small chunks like a bandit as this rallies back above $60 near term.
And just for the putzes, we'll even share our trades when we have time. LOL
Takeoff is done... now for the long flight at high and ascending altitude