Yet when you consider its remarkable advantages, this spectacular growth comes as no surprise. Macao is the only city in the Chinese-speaking world that permits casino gaming. And for Chinese high rollers, gambling is a serious affair. Over half the $100,000+ high rollers in Las Vegas are Chinese. That’s why you see casino-sponsored charter flights bursting with Chinese arriving in Vegas on a daily basis.
Las Vegas is a long way from China. Contrast that with Macao, where there are 2.3 million people with at least $10 million in the bank within "weekend trip" distance. More than 1 billion people (that’s over three times the population of the entire U.S.!) live within a three-hour flight.
Here’s why this week’s Global Bull Market Alert pick, U.S.-based Las Vegas Sands (LVS), is the best way for you to profit from the remarkable rise of Asia’s Las Vegas.
LVS has the crucial "first mover" advantage in Macao, having opened the first Las Vegas-style casino there in May 2004 right in the heart of Macao’s gaming district. LVS’s Macao venture has been a huge financial success. LVS made more money (operating income) last year at the two-year-old Sands Macao ($310.8 million) than it did at its flagship property, The Venetian in Las Vegas ($224.7 million). And The Venetian is itself one of the top three gambling properties in Las Vegas.
Not an outfit to rest on its laurels, LVS is already working hard on expanding its reach to the Cotai Strip in Macao, a project that dwarfs the Sands Macao. The Cotai strip consists of a row of international hotels and casinos stretching for more than three miles. The Macao Venetian Casino Resort will have 3,000 suites. Shangri-La Hotels and Resorts and the Four Seasons Resort and Hotels group will help operate the other properties in the complex. LVS is also planning a resort on Hengqin Island, just one mile away from the Cotai Strip.
Beyond Macao, LVS is looking at opportunities in Singapore, Japan and Thailand. Just last week, it unveiled a $3.6 billion bid to build the first casino resort in Singapore. The size of the proposed shopping mall alone is the equivalent of five Wal-Mart super centers. A positive decision for LVS (look for it in June) will propel the stock upward.
With such an incredible story to tell, LVS is not cheap. But we believe LVS’s astonishing growth prospects justify its current valuation.
So buy LVS at market today, placing your initial stop at $46.50. If you want to play the outcome of the June decision in Singapore, buy the Sept. $60 calls (LVSIL.X )
PORTFOLIO UPDATE
Swiss engineering group ABB reported Saturday that its bankruptcy plan for its U.S. division had been finalized. "This is a milestone in the history of ABB," said Chief Executive Fred Kindle. This should provide upward momentum for the stock.
Shares in Brazilian discount airline GOL rallied almost 6% on Friday, as the Brazilian market settled down from last week’s volatility.
