Today, Keith bought MPEL in the Hedgeye Virtual Portfolio. The Street is still too low on 3Q and the stock is as cheap as it was at $4.
Keith bought MPEL in the Virtual Portfolio at $12.70. According to his model, MPEL has rock solid support at $12.49 (TRADE) and $11.90 (TREND). Fundamentally, MPEL continues to be a favorite name of ours heading into 3Q earnings for several reasons: 1) Street is ~20-25% too low on 3Q EBITDA; 2) among the Macau names, it is the cheapest (under 8x - same forward multiple as when it was a $4 stock) and has the least downside to trough March 2009 levels; 3) Besides Galaxy, which is feeding off of the opening of Galaxy Macau, it is the only operator to have gained revenue market share since Q2 end; 4) It has 100% exposure to Macau, which is experiencing significant growth.