Those with intellect and knowledge would tend to agree "with most everything" I write. That has not been the case with replies when I have suggested selling and or hedging nice runups ahead of the fundamentals over the last 15 months, or even three years ago when I sold out at $16 before it dropped back below $10, or even a year ago out at $15+ to reload just below $12... or any of several other pullbacks to 50d ema or otherwise in recent months. Yet most of what I write tends to be fundamentals, quantitative and otherwise fact-based, the exceptions being my fun with the charts (they have their place in the matrix, but not as the trading key as the recent fail on MANY high quality growth stories of late demonstrates).
This stock IS going to RIP higher... yet this pullback (defined as less than 10%) for the broad market has now turned into a "crucify the overleveraged hedge funds and retail investors who are easy to shake out" with a 20% yankdown, taking this premier growth sector down with it (note that WYNN, LVS and the Asian companies are all ovrsold hard now too). Can it correct further? Sure. I've already said I should have been hedging the core at $42 instead of adding early in this drop, but down here is just plain stupid for MPEL... the first time in the last 10 or so calls on near term direction that I'll suggest I was incorrect on -- for the near term in days not weeks or months. March Q numbers and reassuring outlooks coming right up to the rescue.
Read my comments on how little of this stock has traded relative to solid ownership and, again, ask yourself who is doing all the buying besides us (a fraction of one day's tape since the downdraft). Again, we're taking off other good stories that are not as strong as this to make room to add more on the cheap while it lasts. Not even thinking of it as a trading sleeve -- more at the second tier core. LOL
Have a look back through this beauty from the last time the trading club morons were trying to press. We were hedging the first runup above $44 covered in and back to long around $38 over the next two weeks, just in time with that sleeve to run back to $45+. LOL
Have a read through that again... a few "fear" items added to the list in the last paragraph now, and a fast 20% runup after my Feb 5th post, but right back to $36 on the same hedging and bs shorting dynamics.
Play it again Sam... play it again.
Did I mention we are adding again? Just redeployed another 1/3 of the airline exit capital. We also sold out DNKN yesterday (up just shy of 70% in a little over a year) and TPX (up only 16% this round trip over the last few months). We'll play both of those again if the pantswetting continues.
Some posters here clearly did not understood my subtlety here, so here's a bit more info.
The sector is getting slammed; so are all high beta shares and high flyers are WAY overdue for a good woodshed trip on fear China's economy is in a tailspin (we don't think it is), Putin and Obama's new swagger war (we think will play out as having little consequence shy of launching missiles over bs rhetoric), the mystery flight (we will likely find out had more to do with transporting known to be hazardous batteries that disabled the plane and people aboard) and Yellen's awkward policy talk last week amongst other items of concern. Some professor's in b school will tell you the market is always right, but those pm consistently outperforming the market over years and years make it obvious that quality analysis and fundamentals/quant tend to get it right over the longer than compressed hours and day timelines. LOL
MPEL is slammed out too on all of those items. But keep in perspective that MPEL has some 1.67B shares outstanding (not just the publicly listed 556m shares), 67% of which are owned by Crown Mgmt and Melco. Those two owners are firmly in control of a brilliant future and are not selling ANY shares. Neither is exec mgmt controlling another 3%.
The upshot is to point out that over the last 15 trading days, only some 40m shares have traded -- call it just 7% of the publicly listed shares, less than 1% of total shares. So who is selling? Some pm with big gains are likely being pressured to sell everything with a gain in it to cover leverage line compression as they lose capital on EVERYTHING they own. Then we have others hedging to reduced net longs with box shorts/paired trade shorts (look the terms up if needed), and then we have cowboy unhedged shorts from the trading clubs and otherwise.
Again, ask yourself who besides us are packing away this fire sale shares. This should be over quickly, and sellers will have all year to lament they sold at 52W lows.
LOL... You must be a yahoo database mathematician and capital markets whiz...
So, just for fun, let's focus here on MPEL. You are ascribing what, $1B to Manila?
What "value" do you ascribe to (A) Altria and (B) the mocha clubs?
Please share your idea of what comprises that "value."
They may well soon be in bkr, especially given the lack of sales turnaround (consistent with our view that the brands are passe) and heavy "restructuring debt" burden. Old news and repeating myself, but if any financial player, vulture or not, or strategic buyer was willing to pay more than peanuts for the brands, that would have been done before Rob checked out.
Not much heard from net_stocker or gejim1947 lately... but from their posts, they must have been young guys in 1986 when Geldmen Slacks took ZQK (then QUIK) public the same week as MSFT.
So much for $10+ soon. LOL
Just read Nomura's piece from a couple of days ago. They make the point that VIP is going to be a lot stronger than discounted because the weak junket operators won't have a seat at the limited tables, and those tours with welcome mats out for them will be playing higher limits this year as the best operators focuse on premium mass which is roaring in Macau. No one is doing premium mass better than MPEL.
They also make the point they think the group ebitda mltiple can move up to 13x (vs 12x) because the group ROIC is now over 25%. MPEL's is over 30% friends, and that, as referenced top of thread, is despite carrying the costs of preopening costs for COD Manila, MSC and now the Tower 5 at COD Cotai. MPEL is also growing adj ebitda faster than all other companies these days... but that is not in the valuation yet either.
Besides us, ask yourself who is packing away 3m shares/day over the last few days... and remember that some 3/4 of the outstanding shares are locked up with Crown Mgmt, Melco and exec mgmt.
LOL... and the Mayan calendar is going to mark the end of the world on December 21,2012. Oh wait, that didn't happen... but maybe the sky is falling and we should all run around like chickens with their heads cut off. LOL
We've been sharing for over three years here that the sellsiders in this sector have been way behind the growth curve MPEL has put up over the last three years... That pattern continues on.
That continues. I'll pass on sharing the math work, but if we assume MPEL is not going to dilute their revenue and adj ebitda efficiency (which are growing rapidly as an aside) with COD Manila, then once they have it up to speed (say 6-12 months after Ho's "100% opening" during mid-summer 2014), we can expect them to derive an annualized run rate of $400m+ on the COD Manila for say the second half of CY 2015.
The crackerjack analysts' models published have all the expenses modeled (Manila pre-opening expenses ran over $37M excluding capitalized lease cost of some $10m last year) for 2014, but zero revenues and adj ebitda for 2014. Zero? LOL
Worse, from a quality analysis standpoint that is, the largest estimate we have seen published for Manila in CY 2015 is $100m for MPEL's share, or some $200m in total. Do your own math, but that assumes that this most accomplished team and ownership group in the business worldwide (together owning call it 3/4s of the company) would be happy to derive rev and ebitda returns less than half their current run rate, which as noted above, is already better and increasing faster than ANY OTHER COMPETITOR and also includes the drag of Manila's pre-opening costs last year (again, without revenues just yet).
Unsurprisingly, published estimates on MPEL for 2015 don't include much for MSC. MPEL will have some GGR there too friends. LOL
Most of that "tons of cash" and forward adj ebitda are for Manila, MSC, and Tower 5 buildouts.
Glad some like the idea of dividends -- we'd much prefer they use discretionary cash to take out shares (far more tax efficient than dividends and stock is trading at goofy discount to forward adj ebitda vs peers) on dislocation weeks such as seen right now.
Does anything in there give you the impression they are worried about their premier destination IR places in the sun in Macau? LOL
Record revenues and adj ebitda for the first Q will be out soon now and this box hedge down will end faster than it arose.
Everyone who wants to gift shares to the shorts below $40 better hurry; the dislocation seen this week is about to end.
The stock is down 18% on fear maybe, but more about box hedging and pm selling out their big gains in our view. Fun part is that this is right when the stock should be breaking out to heavy volume new highs.
But this doesn't feel like blood in the streets to our team... more like on the verge of unhedged shorts getting crushed as box shorts come off in a hurry when March numbers are released and people figure out that MPEL is singularly positioned. To see MGM come in is no surprise... and WYNN needed to come in as well if the China's economy repositioning is going to crimp millionaire and billionaire cash flow... but those who think that apprently do not believe the new regime will be serious about powering their way to the new world order for them -- a demand and consumer based domestic economy more than building see through apartment and office buildings in unoccupied cities.
Net net? Barring a china collapse and taking the world economy with it, or, more spooky we think, the West prodding Putin to roll tanks throughout the former USSR, we'll be surprised to see MPEL come in much further -- the bottom may well already be in.
Good to see Putin's guys meeting with the Ukraine coup mates and also the industrial/commodities complex rallying today... if the deep cyclicals/equipment companies are starting to rally already in this correction, and things are much better off than programmed takedown suggests, the market should soon be off to the rip again, at least on top quality growth stories.
Most of the longs who post here own the stock below $30 -- they have been around for somewhere between 6 months and 3 years.
Most of the dip S shorts posting here don't understand the markets, anything about the sector, MPEL's superior competitive position and management team, or the key catalysts coming for MPEL, which, though sometimes spewed by clueless sellside analysts, are not remotely discounted in present valuations.
If we had all of that lack of intellect and understanding, we'd be shorting the hell out of this down here... yeah, that's what we'd be doing, just like the morons shorting 20 shares apiece here. ROFLOL
Cleanup trades already done now? One thing is clear: this big shakeout has clubbed the unbridled optimism seen here on the double top. The next trip to the pivot will be the fun RIP as it blows past that resistance.
Those are the trading club putzes... think roadkill crow food under a steamroller in a few days or weeks at the outside. lol
Not really. We are adding a big ol' trading slug courtesy the pm selling out and or hedging bigger longs. There are plenty of reasons to writhe in angst... but that is all about opportunity for those actually doing the work here.
We blew out a bunch at $43+ on the first run to $45, added a bunch back as it broke down with a double bottom retest just thru the 50d ema, and then began adding a bit more in the low $40s, all as discussed right here.
We are thrilled to be able to lay in a bunch with sell outs of other stocks... love it.
A few ofus here have been discussing a handful of reasons pm long the sector have been selling out or hedging long positions of late, and now that the chart is broken on a pivot (double top) fail at $45.40, in come the trading club putzes with unhedged shorting again.
Time and again we've suggested real work is on the fundamentals and quant, and MPEL remains cheapest in the group on that most relevant part, but the technical perspective is pointed as well. The weekly chart shows the breakdown well; the stock is down some 18%, all the way back to the butch price seen early Feb when the stock momentarily broke $37 en route to a short romping as the shares then ripped 25% higher in less than 5 weeks.
Those with a little capital who understand MPEL's competitive position and the COD Manila and MSC catalysts coming (for which street estimates reflect call it no legit rev/ebitda pickup) are the guys buying all shares being sold down here. We just blew out our longtime DAL, AAL and ALK cores, and so far have about 1/3 of that source of funds added here as a new trade chunk... the reversal coming up should be rapid and powerful.
The two Barrons articles today are surprisingly dialed into what is happening...read them if you are long. The people feeding the author and the sellsiders she is referring to actually understand MPEL's juxtaposition. We think they nailed the WYNN and MGM reliance on VIP part well... and MPEL will be taking their fav VIPs from more than just China into COD Manila within months now -- a new source of competition for WYNN and MGM in macau -- while MPEL and LVS focus on their premium mass. No one does that better than MPEL.
What a f tool... ya, panicking -- we have only a 12% gain so far. ROFLOL at what a moron will write.
You are dumber than redleaf9392959684 -- we'll give you the board chump award this month!
See reply above.
Further, GMCR has had many BIG developments of late, and the stock now has many momo players in hard. It is surprising the runup did not bring the shares in, as it is the relief has not been a benefit as it has with SBUX and DNKN for example.