• Thu. Sep 23rd, 2021

Las Vegas Sands Inventory So Unhealthy, It Could Really Be Good, Says Strategist


Aug 15, 2021

Posted on: August 14, 2021, 01:54h. 
Final up to date on: August 14, 2021, 05:09h.

Todd Shriber Learn Extra

Down 33 p.c year-to-date, Las Vegas Sands (NYSE:LVS) inventory isn’t simply one of many worst-performing gaming equities.

The Venetian Macau. One market strategist says Las Vegas Sands inventory can rebound. (Picture: South China Morning Submit)

Residing greater than 40 p.c beneath its 52-week excessive, it’s the one member of the S&P 500 with a 2021 lack of not less than 30 p.c and one among simply six with year-to-date declines of 20 p.c or extra. Regardless of these ominous statistics, not less than one market strategist believes the Londoner Macau operator can bounce again.

We’re in search of somewhat Girl Luck right here, and having a look at Las Vegas Sands. I imply, it is perhaps so dangerous it could possibly be truly good,” stated Craig Johnson, chief market technician at Piper Sandler, in a current interview with CNBC.

Johnson’s name on LVS inventory comes because the shares closed just below $40 on Aug. 13. That’s above the worst ranges seen this month. However the gaming fairness continues to be residing across the lowest ranges seen for the reason that onset of the coronavirus pandemic final yr, which hamstrung its Macau and Singapore operations.
Daring Name on LVS Inventory
For traders, Sands has the makings of a contrarian play. Whereas it’s nonetheless the biggest home gaming by market capitalization, it has no US operations following the sale of the Venetian, Palazzo and Sands Conference Heart on the Las Vegas Strip earlier this yr.
That makes the operator weak to the still-slow restoration in Macau and Singapore — the corporate’s two largest markets.     That lethargy explains why some analysts turned cautious on the inventory following downbeat second-quarter outcomes.

Macau, the world’s largest on line casino hub, continues to be coping with a wide range of journey restrictions and a current uptick in COVID-19 instances in mainland China. That’s preserving vacationers away from the particular administrative area (SAR). Moreover, Marina Bay Sands (MBS), the corporate’s Singapore property, was not too long ago closed for a deep cleansing following the emergence of a coronavirus cluster there.

“It is a inventory that’s already taken an amazing quantity of ache. Sure, 80%+ of the revenues come from Singapore and Macau, so there are clearly challenges over there with additional lockdowns associated to Covid. However in some unspecified time in the future in time, Covid will cross and we’ll begin to see these playing facilities begin to open up once more,” stated Johnson.
How Sands Can Proper the Ship
Except for rebounds in Macau and Singapore, Sands does have another levers to tug to revive investor confidence. These embrace discovering new US markets, although wagers on New York and Texas have but to repay.
Moreover, the operator may lastly push into on-line gaming and sports activities betting — two fast-growing segments it’s largely absent from. Final month, Sands created a digital gaming funding arm. But it surely’s but to announce any transactions on that entrance, whereas dealmaking within the area is operating at a brisk tempo in current weeks.
With one of many stronger steadiness sheets within the trade, Las Vegas Sands may additionally restore its dividend or repurchase shares to sign to traders administration is assured within the inventory.

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