THE MACAU METRO MONITOR, JUNE 26 2013
MACAU LEGEND CUTS IPO SIZE BY MORE THAN HALF Macau Business
Macau Legend has cut its initial public offer shares to 934.8 million from an earlier 2.05 billion. The company cites that current market conditions have changed. The offer price range remains unchanged at HK$2.30 (US$0.3) to HK$2.98 each. The price determination date is now July 2. Trading is expected to start on July 5.
Macau Legend, headed by David Chow Kam Fai, was previously looking to raise up to US$786 million (MOP6.3 billion) through its IPO on the Hong Kong Stock Exchange. Now, it could raise up to US$358 million.
LAS VEGAS SANDS SAYS CFO KAY LEAVING Bloomberg
Kenneth Kay will leave effective July 31. The company didn’t give a reason. Kay will provide transition services as part of a six-month consulting agreement, the Las Vegas-based casino and resort company said in a filing yesterday.
TODAY’S S&P 500 SET-UP – June 26, 2013
As we look at today's setup for the S&P 500, the range is 54 points or 1.77% downside to 1560 and 1.64% upside to 1614.
CREDIT/ECONOMIC MARKET LOOK:
MACRO DATA POINTS (Bloomberg Estimates):
WHAT TO WATCH
COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)
The Hedgeye Macro Team
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Takeaway: A quick snapshot of Hedgeye CEO Keith McCullough's top tweets today.
Learn from every mistake, but wake up expecting to win the next game
@KeithMcCullough 3:59 PM
I've tried over-trading low-volume whip arounds plenty of times - its no way to live
@KeithMcCullough 3:44 PM
Do what you do, let everyone else waste their day trying to be someone else
@KeithMcCullough 3:41 PM
$TSLA remains one of the markets new Generals; no resistance to all-time highs
@KeithMcCullough 3:30 PM
Where I come from, respect isn't allocated to an aristocracy of perceived wisdom - it's earned, every day
@KeithMcCullough 10:44 AM
We need to get rid of all these losers whining, and get on with winning - let rates rise for God's sake
@KeithMcCullough 10:14 AM
To be fair, this is a legacy #OldWall problem - most are pigeon holed into being bullish or bearish, in boxes
@KeithMcCullough 8:21 AM
Takeaway: We rarely classify NKE EPS a 'do nothing', but that's this Thursday's print. The story is intact. If the noise is loud look to buy the news.
Thursday's Print = Buy the News: Nike remains one of our favorite longs, as we think that estimates are low by 5% next year ($3.25)and 10% the year after ($3.75). But we don't think the 4Q print on Thursday is a 'buy ahead of the numbers' kind of event. In fact, we'd classify it more as 'buy the news' -- whether positive or negative. We think the company will beat, but in less sexy parts of the P&L like SG&A, while at the same time it should keep the lid on guidance for next FY. Recall that it was just 13 weeks ago that NKE guided for FY14 to be 'at or above' its high-single-digit top line long-term growth forecast, and 'at the high-end' of its low-mid teens long-term EPS growth target. Since then business conditions have remained relatively stable, but they clearly have not improved. As such one thing Nike absolutely won't do is let estimates go any higher for next year -- even if strong fundamentals suggest otherwise. They'll say what they have to in order to keep the Street grounded. Without any guidance upside, and with a lower-quality beat, we simply don't think this qualifies as a 'trade into the quarter'. That's especially the case with short interest sitting near historic lows. If the stock trades off on the news, then we get much more interested near-term.
Now we'll talk out of the other side of our mouth. It's probably a lousy short as well. Simply put, it’s an extremely high-quality leader in a Global duopoly with dominant market share, rising returns, 8% of its market cap in cash and a consensus that is underestimating the earnings power of the company 2-3 years out by 10-15%. Oh…and by the way, they're not going to let the stock tank only days after the announced voluntary retirement of one of the most popular executives in the company's history (Denson won't be a fall guy). Could it sell-off around a noisy quarter? Sure, especially at 18-19x next year's earnings. But it'd be an event that we'd look at to go the other way.
Here are some factors to consider headed into the print…
Ultimately, we have evidence that the US is still healthy. If you want to be bearish on the US, it will need to be 3-4 quarters out which is when visibility gets cloudy. But then we've got greater contribution from China and Emerging Markets, and more importantly, we get into World Cup Territory in the summer of 2014 in Brazil. Our point is that it will be pretty tough to be a big bear on Nike's top line over the next 12 months.
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