For Las Vegas Sands, the House Edge is Geographical Diversity

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Las Vegas Sands (LVS) benefits from being relatively more geographically diversified than its most prominent competitors -- companies such as Wynn Resorts (WYNN), MGM Resorts International (MGM), the Macau-based SJM Holdings (SJMHF) and Genting Singapore. Las Vegas Sands' casino resort presence spans the U.S., Macau and Singapore.

Our price estimate for LVS stands at $49.36, implying a 10% to 15% premium to market price.

Geographically Diversified Operations

A wider presence worldwide gives stability and strength to a company's top line. For instance, while the recent economic recession hit LVS' Las Vegas operations, its effect was mitigated by the substantial growth of the Macau gaming industry.

LVS' Macau operations currently include Sands Macao, The Venetian Macao and Four Seasons Macao. LVS is also in the process of developing a facility on the Cotai Strip in the region (at land plots designated as parcels 5 and 6). In April 2010, LVS opened the Marina Bay Sands facility in Singapore, at an approximate cost of $5.5 billion.

Domestically, the company operates the Venetian and Palazzo in Las Vegas, as well as the Sands Bethlehem Resort in Pennsylvania.

By comparison, competitor Wynn Resorts is primarily split between Macau and Las Vegas, while MGM Resorts International is more concentrated in Las Vegas.

But LVS has its eyes set on expansion into still more geographic regions. In a recent press release, the company noted that it is eyeing a $20.3 billion project in Spain. CEO Sheldon Adelson has indicated the potential to create a mini Las Vegas Strip in Europe.

 

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See full article from DailyFinance: http://srph.it/jfLXgX

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