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How Does Melco Crown Entertainment Compare to Its Peers?

Gabriel Kane

Melco Crown Entertainment's Revenue and Income Rose in 3Q15

(Continued from Prior Part)

Melco Crown Entertainment and its peers

In this part, we’ll compare Melco Crown Entertainment with its peers:

  • The PE (price-to-earnings) ratios of Melco Crown Entertainment (MPEL), Las Vegas Sands (LVS), and Wynn Resorts (WYNN) are 34.0x, 16.7x, and 38.2x, respectively.
  • The PBV (price-to-book value) ratios of Melco Crown Entertainment, Las Vegas Sands, and MGM Resorts (MGM) are 2.4x, 5.6x, and 2.3x, respectively.

  • The price-to-sales ratios of Melco Crown Entertainment, Las Vegas Sands, MGM Resorts, and Wynn Resorts are 2.3x, 3.1x, 1.4x, and 1.7x, respectively.

As a result, Melco Crown Entertainment outperformed its peers based on the price-to-sales ratio.

ETFs that invest in Melco Crown Entertainment

The Global X China Consumer ETF (CHIQ) invests 4.0% of its holdings in Melco Crown Entertainment. CHIQ tracks a cap-weighted index of Chinese consumer goods and services companies that are tradable by foreign investors.

The Global X Guru International Index ETF (GURI) invests 2.6% of its holdings in Melco Crown Entertainment. GURI tracks an index of US-listed international stocks, ADRs (American depositary receipts), and GDRs (global depositary receipts). The index screens hedge funds and the stocks they hold. The selected stocks are equally weighted.

The Market Vectors Gaming ETF (BJK) invests 2.4% of its holdings in Melco Crown Entertainment. BJK tracks a market-cap-weighted index of global companies that generate at least 50% of their revenue from gaming and related activities.

The First Trust ISE Chindia Fund (FNI) invests 1.7% of its holdings in Melco Crown Entertainment. FNI tracks an index of stocks from China and India that are screened by market capitalization and weighted in tiers.

Comparing Melco Crown Entertainment and its ETFs

Now, let’s compare Melco Crown Entertainment and the ETFs that invest in it:

  • The YTD (year-to-date) price movements of Melco Crown Entertainment, CHIQ, GURI, FNI, and BJK are -24.8%, 10.6%, -7.1%, 2.6%, and -11.5%, respectively.
  • The PE ratios of Melco Crown Entertainment, CHIQ, GURI, FNI, and BJK are 34.0x, 10.8x, 19.5x, 19.7x, and 24.0x, respectively.
  • The PBV ratios of Melco Crown Entertainment, CHIQ, GURI, FNI, and BJK are 2.4x, 1.7x, 1.2x, 2.8x, and 2.5x, respectively.

According to the above findings, the ETFs outperformed Melco Crown Entertainment based on the price movement. However, Melco Crown Entertainment is way ahead of the ETFs based on the PE ratio.

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