How Much Is Macau Growth Really Slowing?

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When emerging trends start to slow, they look like they are dying. That may not be the case in Macau, but lower growth rates in China and emerging market panic is spooking the gambling stocks with big exposure in Macau. The continued selling was helped in part by cautious comments from J.P. Morgan earlier in the week, but the drops are severe enough that you have to wonder just how much the growth is slowing down in Macau.

Melco Crown Entertainment Ltd. (NASDAQ: MPEL) is the pure-play. and that stock was down a sharp 7.1% at $38.76 in the last hour of trading on Friday. The 52-week range is $17.76 to $45.48, but that 52-week high was just last Friday. That is almost a drop of 15% from the peak just in a week. The pure-play for Macau is worth just over $21 billion.

Wynn Resorts Ltd. (NASDAQ: WYNN) was down 5.9% at $193.16 in the final hour, with a 52-week range of $113.39 to $216.99. That high for Steve Wynn’s dream empire was just hit this last Tuesday, so in four trading session the stock is down almost 11%. Wynn’s market cap is $19.5 billion.

Las Vegas Sands Corp. (NYSE: LVS) was down 5.8% at $74.12 in the last hour of trading on Friday. Its 52-week range is $47.95 to $82.48. That high was just seen this last Tuesday as well, so Sheldon Adelson’s empire has fallen just a tad over 10% in the last four trading sessions. Las Vegas Sands is still worth some $61 billion.

MGM Resorts International (NYSE: MGM) is the last of the big casinos with a Macau destination, and its shares were down 5.9% at $23.70 late in the day on Friday. This is still worth about $11.5 billion. The 52-week range of $11.72 to $26.70 saw its recent high hit last Friday. That puts MGM down 11% from its peak in a week.

These seem harsh on the surface. The moves may be simple buying opportunities; or you can argue that the stocks doubled to levels unsustainable. Investors have been looking for a sell-off (and maybe hoping for one) in the broad stock market. When it comes to being bullish or bearish on casinos at these valuations the best thing to say is “You Wanna Bet?”