Important Updates for Investors
Carla Pasternak's Premiere Issue of High-Yield International Just
Released
Income expert Carla Pasternak's debut issue of High-Yield
International covers a Taiwanese manufacturer yielding 9.5%... a
rare Mexican monopoly yielding 13.4%... and other top-performing
investments yielding up to 19.0%.
Government's Biofuel Timetable Could Spell +15,900% Growth
+15,900% growth might seem far-fetched... but it's not. In fact, it
is mandated by law. And I've identified the ONLY stock positioned to
capture this growth.
The
Silver Lining to a Falling Dollar
Despite the U.S. national debt, there is a silver lining for income
investors. This massive spending, combined with movement out of U.S.
Treasuries, is going to take its toll on the dollar, and
international income investors could reap the rewards in the form of
higher dividends. |
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An
Undervalued Casino With +38% in Upside Potential |
Published:
September 1, 2008
While many industries tied to discretionary consumer spending
have been roughed up by this downturn, the gaming sector has
been ground zero. And Wynn Resorts (Nasdaq: WYNN, $95.42),
just like its peers, can be had for a fraction of its actual
fair value -- sweetening the odds for those
looking to place their bet on this top-tier casino operator.
CEO Steve Wynn is the consummate real estate developer. In fact,
many credit Wynn as being the architect of Las Vegas'
transformation from a rough-around-the-edges gaming town into a
sophisticated, world-class entertainment destination.
He began with the Mirage in 1989, built for a then-exorbitant
cost of $630 million that many said would never be recouped. But
the upscale property paid for itself within 18 months
-- volcano and all -- and Wynn's critics fell silent. He went on
to build ever more lavish mega-resorts like Treasure Island and
Bellagio before cashing in his chips and eventually forming a
new company.
Based on Wynn's vision and reputation alone, investors bid the
newly minted shares up some +400% by April 2005, pinning a $6
billion market cap on the company before it ever took in the
first penny in revenues.
Wynn's signature resort opened for business soon after, and the
over-the-top $2.7 billion creation became an instant hit with
affluent visitors. At a staggering building cost of $1 million
per room, the resort was the most expensive privately funded
Wynn Resorts development in history. Whenever your
poolside cabana comes with its own iPod and there is a Ferrari
dealership on site, you know you're not staying at a
run-of-the-mill resort.
The company has since unveiled a dazzling $1.2 billion resort in
Macau. Just a tiny dot of land jutting into the South China Sea,
Macau is ideally located to capitalize on the ravenous gaming
appetites of hundreds of millions of Asian players. In fact, the
gaming hotspot has already surpassed Las Vegas as the world's
top-grossing gaming destination.
So how are these two properties doing today?
The Wynn Las Vegas continues to shine in even the darkest of
conditions. Over the past three months, the resort has taken in
over $120 million in gaming revenues -- down from last year, but
still stellar in absolute terms. Meanwhile, revenues outside the
casino were actually up for the quarter, with the hotel,
food/beverage, retail and entertainment departments chipping in
a total of $212 million in revenues.
While other resort owners have had to slash hotel room rates to
drum up business, Wynn is still charging over $300 per night --
and getting it. In fact, occupancy has barely budged during this
downturn and remains at 96.5%.
And across the globe, Wynn Macau has quickly become one of the
world's most profitable casino resorts. Each of the property's
1,258 slots is now taking in $359 in revenues per day, with slot
wins spiking +90% last quarter. Macau's ability to lure
high-rolling baccarat players has each of the resort's tables
generating hefty wins of $17,300 per day. With a little number
crunching, it's easy to see why revenues and
EBITDA at the
resort have climbed +50% and +67%, respectively, year-over-year.
Overall, impressive gains in Macau have been more than enough to
offset the mixed results in Las Vegas. Company revenues
through the first half of 2008 have jumped +21% to $1.6 billion,
while operating income has increased modestly to $236 million --
and this during an unprecedented downturn.
Looking ahead, Wynn has already earmarked $3 billion for two new
high-end resorts (both dubbed "Encore"), which are under
construction adjacent to existing Wynn properties in Las Vegas
and Macau. Both stand to juice cash flows dramatically once they
open to the public. Wynn also operates a beautiful (if
underutilized) 140-acre golf course on the Las Vegas Strip that
is easily worth more than $2 billion based on the going rate for
prime Strip real estate.
I conservatively value the company's assets and discounted cash
flows at $132 per share. Thanks to this overblown sell-off,
investors can now enjoy a gain of +38% before WYNN hits its fair
value.
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Nathan Slaughter
Editor
Half-Priced Stocks, The ETF Authority
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Investing Doesn't Get Any Easier Than This |
Stock picker Amy
Calistri's strategy is as simple as investing gets -- just one idea
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