Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Leisure Stocks to Consider Buying for Value, Growth, and Stability: Las Vegas Sands Corp. (LVS)

Page 1 of 2

If the macroeconomy is starting to look brighter, it makes sense to invest in companies that are geared towards making life, well, more fun. If consumers have more money to spend and are feeling more optimistic about the future, demand for leisure, or luxurious goods, will increase. In my view, the toy and casino industries stand to benefit from an improving macro environment. Below, I review two key stocks that I am optimistic about within these categories.

Las Vegas Sands Corp. (NYSE:LVS)A Look at Casinos Through Las Vegas Sands Corp. (NYSE:LVS)

As I suspected, Macau proved to not be nearly as big of a negative catalyst as analysts made out. Tailwinds from Macau actually drove gambling revenues up by 7.9% in November. Currently, it continues to be one of the best markets in the world with consistent sequential growth. Macau revenues went up by 19% in 3Q12, a 14% increase from the same period a year earlier. In 4Q12, the market share went up by 35%, and the win ratio was a reported 20%. LVS is now reportedly outperforming the market. It should thus not be surprising that the stock has risen 37% over the last six months.

The table business in Macau has seen its win per table rise in defiance of all of the talk about instability in Macau, especially in connection to the government change. In 2Q12, LVS even doubled down on its Macau bet by expanding with two more casinos and the addition of 3,500 hotel rooms plus 2,000 more in 1Q13. They are currently constructing Parisian Macau, which should open by the end of 2015.

It’s one thing to have growth; it’s an entirely different thing to have value creating growth. As the famous McKinsey book on corporate valuation can tell you, growth that does not drive a return on invested capital above the weighted average cost of capital kills value. When management loses a vested interest in the company, it tends to become more interested in empire building. By contrast, LVS’s Chairman & CEO Sheldon Adelson has a large equity stake in the company and remains committed to creating value. His focus is therefore on only investing in projects that will give a ROI of at least 20%.

Toy Time? Why You Should Buy Mattel, Inc. (NASDAQ:MAT)

The famous Barbie maker has seen its shares rise relentlessly since it was listed on the NASDAQ. It is now up 27.9% over the last 12 months and continues to deliver terrific operating performance. In the fourth quarter, international sales rose 4% and margins expanded by 290 bps. Monster High and American Girl brands rose by double-digits, 55% and 13%, respectively. This execution is reinforced by the company’s commitment to returning free cash flow to shareholders in the process. The firm recently increased its dividend by 16% to a yield of 3.8%.

Mattel’s brands are quite resistant to macro challenges, which is evident by how they experienced better recent results than peer companies in the recent quarter. Despite sales erosion for Barbie in 4Q12, innovation, as highlighted above, continues to drive the company’s bottom line. This keeps me optimistic that the firm will be able to outperform the broader market. While it will be easily able to track economic growth, it can create value on top of that through leveraging its powerful brand in the introduction of new toys. The new aggression towards securing new licensing rights to the top production studios for their toys, including The Walt Disney Company (NYSE:DIS) and Pixar, represents, for example, a step in the right direction. Meanwhile, market share continues to rise in North America and Europe.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!