excellent, erudite comments... are you from the region?
I don't waste my time with thumbs up or down, but i just gave you thumbs up on that!
Now you sound just like matrixputz. "Promoting?" Is that what suggesting some might want to sell or hedge some or all of their shares at $43 last january was? How about reloading the trading allocation at the $37-38 level for the run up into the double top retest in march where I explained why we sold out again there?
Your comments are thin here toast... I'm not "promoting" anything, more at sharing perspective with respect for all but those tools trying to dis me -- they deserve their share of kicks to the face.
fwiw, I have yet to cover the MGM hedge... there is lots of room for market chop, and anyone who has concerns about the downside here should have been hedging or sold out long ago. Down here, it is time for spec capital to get back to long or add to positions -- unless you think Xi Jinping wants to turn Macau into a ghost town ala Atlantic City... his new finance minister being sworn in on Friday has a far better outlook for Macau and its "edge" if you have been doing some remeidal reading shared here.
toast, you have long been one of the quality posters here with pro and con perspective.
While matrixtrade, the moron who was hyping his PT of $75 for MPEL this year -- the same week i explained why we sold out the then trading sleeve at $43 and hedged the $17 core back to the first dip to the 50d ema around $37.50 then) continues with his blithering stupidity about how the analysts are brilliant, the reality is that all but one of them still had a BUY rating and the consensus target was $51 until the first week in August when Zhou (China's former security chief succeeded by the new guy in the news this week with dippy HK "newspaper" saying they are going to Fox Hunt all the crooks and review large/suspicious money transfers in Macau and mainland banks which was already happening all year) was arrested for gross fraud and Ho reset expectations on mass (from 35%+ ytd and for 2h VIP "recovery" to VIP staying subdued and mass to run at half that rate (before the recent table reclasses to VIP for smoking purposes).
So now, as even the shorts posting s head commentary here all month are pointing out that most analysts are sukin, those "listening to the analysts" are likely to wind up on thew wrong end of the reversal, just like they did in late 2012 and mid 2013 and early 2014 and reloading the dip before the retest/double top in March...
Seriously toast, the "analysts" are F worthless on this sector. On the airlines, oil& gas, banks and many sectors there are several excellent analysts, but seemingly only Bain actually talks to the exec teams even... the rest can;t even get the facts correct most of the time, let alone share worthwhile insights.
and "So far this month" -- this is the Xi Jinping month... LOL
Have a study of a quality log chart on these and MGM and you'll see why MGM is the step down hedge of choice vs the MPEL long of late (WYNN is beat enough) tumbling the hardest this week. For it to catch up with the other three, MGM needs to test $13 -- down another $4. Market savvy players know that when groups are trading on panic and disinformation, the stocks all want go together, whether that is to the downside (currently on FUD and the bs that "illicit money transfers by those committing fraud against the Chinese govt" somehow means Beijing wants to kill wealthy people gambling in Macau) or to the upside.
Since then, MPEL has gone from 70% of its revenues being from VIP to last Q where only 5% of ebitda was from VIP for MPEL... and Manila is opened, Studio City phase 1 opens in 7-8 months and Tower 5 at COD is under construction.
and oh, last time I checked, MPEL has no shady VIP tours illegally transferring money through Macau banks, let alone in any way involving MPEL's treasury operations..
Looking forward to Xi Jinping's media kit and speeches in two days.
It is no fun owning shares when they drop, but you might search the terms "box short" and "paired trade" here... those who have hedged to reduced net longs or neutral exposure positions over time, even if only when I've noted we have here, use those hedge positions to eliminate, mitigate losses in chop periods...
Being long MPEL and MGM magnifies your downside exposure to one or the other... that is just the opposite of mitigating risk. Our step down hedge pairs have been WYNN and especially MGM as noted here prior. That said, MGM is certainly playing catch up this week... down 8% today -- about to cover that again as even MGM is too cheap down here, especially given Jinping is unlikely to say Macau needs to be eliminated when he arrives Friday and the new Finance Minister is seated the same day.
On hedging and playing the upside when the group stops vomiting on itself on bs headlines fed to the media and weak analysts by HF net short the stocks (while MPEL and LVS stand on the buyback throttles), you might also want to study MPEL's ebitda... that WYNN, MGM and Galaxy have large exposure to VIP dropping perhaps for more than a few weeks or months in Macau (the market is now beginning to figure out that those stocks need to come down a bunch vs LVS and MPEL moves to date) is not the same thing as "GR getting worse," nor is it a reality that "gaming is past" [sic] in Macau, though I agree the Vegas heydays ended when Asian players had better places to play without flying 15 hours each way to play in Vegas for one night.
That is the same (highest to date) number as the day before and makes it 8 days in a row and a total of 5,479,522 shares....
Apparently Lawrence Ho and Jim Packer think buying more MPEL stock down here is worthwhile.
Xi is coming Friday... out to kill Macau and its surrounding $100B+ investment in economic development, or bringing some logical and conciliatory comments that Macau has a bright future along with China in the area... but no one who is a criminal should try to divert ill gotten money away from China and their Fox Hunt...
Re "fighting city hall," why fight when you can think instead? It certainly has been a rough time for macau names, but lots of stocks are in the s'er these days -- for how long and the turnaround, if any, timeframe is what is relevant. In the interim, no one is forcing your or any of the 13F owners to buy or hold this or any other stock. If you don;t like the upside risk reward here, you should be out, literally or synthetically at least. Ultimately, risk reward is the totality of every quality decision to allocate/protect capital.
Noted many time here, but you could have sold out/ hedged a bunch of low basis shares last january and march when I suggested it may make sense for many to do, or after Ho's "reset" of mass expectations in early August, or as the Zhou arrest news was hitting the tape at the same week as shared right here.
Those would have all been good times to think about gain preservation/ selling calls and or shorting the box to eliminate, neutralize or merely buffer your downside... or pair the long here with a short on other names that have far more downside expsure if Beijing is, in the end, actually out to eliminate VIP play. THAT is a far different objective than hunting down criminals ("fox hunt" targets -- who have fraudulently garnered megawealth in china and then transferred it out of China via "illicit" channel;s having nothing to do with VIP cages and baccarat.
All that said, high beta names across the board (NFLX, TSLA, AMZN, GPR , many retail names, gaming companies, railroads, tanker/shipping cos, the oil leassees/frackers have been hammered this year and especially lately)... and selling in panic drops usually benefits no one except for the unhedged shorts. In fact, it may be that brighter times are just ahead... in the volatility chop this week, seems to some that the smart guys are buying all the daytraders and algo programs will short to them, including MPEL's aggressively taking in shares down here.
Congrats to Shuli Renn - she actually wrote a balanced piece this morning, the totality of which is to make fun of the "news" of the South China Morning Post article that created more FUD for Macau stocks over the last couple days in the US markets. But read it all well before jumping out any windows... the "Fox Hunt" concept of tracking down ILLICIT money transfers is decidedly NOT NEW, nor is reviewing suspicious bank transfers through macau or anywhere else in China.
Some may realize that it is NOT illegal for junkets to legally raise money to fund client play in Macau... that is how things have long worked in Macau.
As for other markets, Sy and his pals in the Philippines likely do not engage in massive fraud or illegal money transfers, and China does not control non-Chinese banks anyway... same for wealthy Japanese, taiwan or Korean patrons playing baccarat anywhere they want to.
Good to see MPEL continuing to buyback stock with both hands while the getting is cheap... 7 days in a row with serious buys, and yesterday's the biggest yet. More IMF today as well, and Jinping is coming Friday. Haven;t seen the press kit yet...
Chewy market these days, back on chop with step offset MGM as the pair again (short), the favorite for this since MGM is still overvalued vs the group, and LVS and WYNN have already caught up with MPEL...
Given 95% of MPEL ebitda last Q was mass play and continues to have the highest table yields, MPEL remains the best positioned to weather this chop of the broader market and group... so it is overdue to see the other three US listed compnaies come in hard.
No nation benefits more than does China (and japan on a relative basis) from this oil collapse... why are 83 VLCC ships ripping to China as I write? Does it sound like they think the fire sale on oil lasts for long? Does it sound like they think the "Sky is Falling" on their economy, or, just the opposite, do they maybe just want to buy all they can down here because they think panic selling is a good chance to buy the cast off items?
goog this to read more:
Record Oil Tankers Sailing to China Amid Stockpiling Signs
Speaking of dislocation, Russia took their base rate to 17% today.... sounds a bit panicky doesn't it? How long do the sell algos run before getting swamped by the dark pool bids? LOL
Fun to note Bain reiterated his ftm PT of $39 and BUY rating today and, again, easy to suggest waiting for the gaming group to get back above the 200d ema where the chart guys will all come back on unless one is a fundamental/ebitda/value player, but that turn may happen quickly. Meanwhile, MPEL has the best business plan and book of catalysts in the business, and just maybe Xi and the new Macau regime will not come in with their heads up their hindends when Xi Jinping visits on Friday. LOL
Fitch's comments are entirely consistent with MPEL's mass gaming revenue (adj for the table swap from mass to vip for premium which data is now cluttered for the next few reports on MPEL and likely others) up YOY in both October and November... but anyone who has followed MPEL with any real work knows VIP is not the focus or superb execution anyway.
Those who have not read the JCapital article from last week's Barron's ought to. Blankfein and others have discounted the rhetoric therein, but there is likely some truth to the idea that Xi Jinping's political "enemies" are the people under siege here, not real players and tours not an "enemy" of the party or Jinping will grab the spoils.
Meanwhile, the collateral effects of the real estate liquidity crimp combined with the "corruption crackdown" and conversion of many small VIP tour clients to direct credits with the casinos has narrowed the number of tour operators from almost 200 three years ago to what will likely be more like 15 or less in a matter of months, so that does change things, but not like the hapless analysts, journalists and morons on chat boards suggest. They all seem to think VIP is dead, obviously not realizing that still, even today, some 80% of peak VIP play has continued -- at least through last month. And yes, even most execs now agree Xi Jinping's visit this week has everyone holding their dice until his visit (see his notes from his 2009 visit for some clues the media and analysts likely never saw LOL).
So Neptune (tour) is under siege and has been for 3 yrs, BFD. Sun City, the largest of the large 15 junkets that are still doing the 80% business despite the fold of the other 160 or so junkets that have disappeared for the reasons known to those paying attn, is still running some 20 clubs in AP and almost 300 tables in Macau, incl the new ones at Altira. Does that sound like VIP is "dead"? Hardly, they will do some $190m USD of revenue this year.
Abe wins general election raising hopes for casino bill
"Japanese Prime Minister Shinzo Abe has won a big win in general elections and pledged to drive through his economic reform plan, raising hopes a bill to liberalize the country’s casino market may be back on the agenda.
The LDP and its junior partner, the Komeito party, won 326 seats in Sunday's poll to maintain a two-thirds majority. That was unchanged from the coalition tally before the poll, although the LDP itself slipped slightly to 291 seats from 295. However, turnout was a record low.
The casino bill was put on hold indefinitely last month amidst a political scandal that prompted Abe to dissolve parliament and call snap elections. Abe is a strong proponent of the bill as a key pillar in his plans to boost tourism revenue."
Regarding that last sentence: "Abe is a strong proponent of the bill as a key pillar in his plans to boost tourism revenue"...
Abe should share his ideas on stimulating revenue and tourism via Integrated Resorts/Gaming with Jinping just for good measure. LOL
Macau CE appoints new Finance Secretary, shakes up leadership
Macau Chief Executive Fernando Chui sai-on has appointed Lionel Leong Vai Tac as the territory’s new Secretary for Economy and Finance in a wide ranging reshuffle of top leadership.
Executive Council member Leong replaces Francis Tam Pak Yuen who had held the post, which traditionally oversees gaming policy, since Macau was handed back to China from Portugal in 1999.
Chui, who was recently re-elected for a second term, also replaced four other policy secretaries.
"It's a big change in the leadership of the next government, which is surprising. It shows that Chui wants to change government practices and policies," Eilo Yu Wing-yat, a University of Macau public administration scholar told the South China Morning Post newspaper.
The new team will takeover on Dec. 19th.
MPEL 820k additional shares filed last night makes it six (6) days in a row with meaningful activity prior to Xi Jinping's visit next week, totaling 3,689,522 shares on top of the 1m shares they did last Q. At present levels, another ~16,000,000 shares to go under the initial $500m authorization.
Excellent news for ROIC and adj ebitda/share going forward...
MPEL filing last night adds another 820,000 shares, the sixth day in a row (prior to Xi Jinping's visit next week) of serious buyback activity under the initial $500m authority. At current levels, another 16,000,000+ shares to go...
Again, given that Packer and Ho understand the relevant industry dynamics and the AP market arguably better than any other executives in the business, refreshing to see them step up to use a little bit of their capital flexibility to improve ROIC and adj ebitda/share, a fine contrast to the gloom and doom endlessly being regurgitated since late July by the lame media and weak analyst group running around yelling, "The Sky is Falling... the Sky is Falling" on China and Macau...
Pointedly too, given that MPEL is leading the group on mass and premium mass yields, occupancy, etc in Macau, remember that China (as an industrial nation and increasingly consumer focused direction/initiatives and call it 100% importer of fuel) is benefiting more than any other nation from the massive drop in the energy complex, without putting extraction/distribution job creation in jeopardy...
Re my comment: "Today put on a new hedge (MGM) which has held up too well relative to the Macau group on the prayer that MICE biz is really special in Vegas and the dead albatross note (LOL)"...
Just covered that hedge at $20.60 on the retest (as noted above, this offset hedge was put on in case the group was going to continue the freefall today) with a $.70 pickup. Fun... but don;t want to be short (even as a hedge) any of the Macau names, even MGM, into the weekend given: how nutty oversold the group is down here; the HK Umbrella protest is vanquished; and Xi Jinping is coming Monday.
Good luck to you too Ed... better days ahead for Macau, and especially MPEL.
Last night's filing shows they bought another 800,000 at $23.08 w ave yesterday, making it now 5 days in a row with activity and a total of 2,869,522 share repurchased between $22.88 and $25, on top of the first 1m shares under the buyback plan last Q at ~$27.
As the stock has gone off with the sector dropping further, these buybacks are coming "cheap" relative to the earlier buys. At $23/share, yesterday's w ave and the closing price, they can still buy another 17.5m shares or so under the current authorization. Given they have far better info on what will unfold in coming months on Macau policy and fwd VIP bookings from Suncity and other top tier VIP operators than anyone, it is good to see them stepping up to the plate and making a statement down here.
Again, that 17m+ additional shares (ADS equivalents) would take out roughly 4% of the baseline share count Ho and Packer's separate companies' ownership of MPEL up to over 70% of outstanding shares, which, unless they immediately re-up the buyback authorization, would be a fun time to "pull the borrow"... even though the SI remains light, especially considering hedge positions.
I shared the math on the 17m (before any bought in today which appear to be on the order of 400k or so as an educated tape study), but when done, Packer and Ho's separate companies will control over 70% of MPEL shares, up from close to 67% today.
Under the current buyback authorization level, clearly an agenda controlled by Ho and Packer who together own some 67% of the company, the $500m will let them retire another 17,000,000 or so shares at $24/share, a number on top of the 3m shares taken out of late.
MPEL disclosed in their early 2014 filings that they are now planning Phase 2 of COD manila and also a second or "expansion" phase for Studio in Cotai, so, assuming the new Macau/china policy directives make sense to deploy more capital in Macau, that is a busy agenda for them over the next several years on top of Studio City rollout and Tower 5 at COD Cotai... but they have also been earmarking another $5B or so for a major Integrated Resort in Japan, which for now is on legislative hold in Japan for all would be concessionaires. For how long? Indefinitely? They have now missed the Olympics urgency.
In this context, it is interesting to see the share buybacks kicking in with some seriousness this week, ahead of Xi's visit... they began with 1m shares at ~$27 last Q, and now they are more aggressive at $24-25, so good statement to make. But might they get really serious now at $24 w/out Japan right now? Here is what Ho said on the last call:
On capital mgmt and growth opportunities (incl Japan):
"At this point the primary consideration is having the optimality to pursue transformational growth. To the extent that we become a more mature company with fewer transformational growth opportunities, then target leverage ratio will be more of a driving factor for us going forward. But to the extent if we were to see large opportunities such as Japan fall away that would meaningfully change our view and our policy on capital allocation and share repurchase and dividend."
That comment was made in early November. He does not sound afraid of Macau's future if you heard the comments...