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Heaven and Power

I am quite unable to see why Heaven or any other Power should object to our telling the Moslem what he ought to think.”

-Arthur Balfour


It’s no wonder why history remembers Lloyd George’s decision making process in Paris in 1919 as so politically conflicted and morally confused. Balfour (British Foreign Secretary 1916-191) and Henry Wilson (George’s chief of the British Imperial Staff) would almost come to blows on big imperialist planning topics (like what to do in Turkey).


Also overlooked were the Turks themselves. Almost everyone in Paris assumed that they would simply do as they were told. When Edwin Montagu, the British Secretary of State for India cried, “Let us not for Heaven’s sake, tell the Moslem what he ought to think, let us recognize what they do think.” (Paris 1919, Six Months That Changed The World, pg 380)


Does getting a bunch of pompous politicians in a room in Paris solve or perpetuate the world’s long-term risks? Post WWI, the answer to that was a disaster. There’s no reason to believe that trying to centrally plan the Egyptians or Portuguese this morning is going to be a success story either. Our centrally planned world is long of political arrogance and short of human empathy.


Back to the Global Macro Grind


From a globally interconnected risk perspective, this morning is one of the uglier ones I’ve seen in the last few months. It’s not just Egypt jamming oil prices up and Portuguese bond yields blasting higher either. Here’s what’s going on:


1.   ASIA – Indonesian stocks (-3%) and the Hang Seng (-2.5%) led a broad based ex-Japan meltdown in Asian Equities overnight. China printed another miss on the Services PMI front (53.9 vs 54.3) in June and it has become clear that Asian #GrowthSlowing is a reality. Every single Asian Equity market other than Japan is now bearish TREND @Hedgeye.


2.   EUROPE – Greek stocks continue to crash this morning (-30% since May 17th); Portugal’s stock market is down -5.7% (10yr bond yield in Portugal tested 8% for the 1st time since November); and the rest of European major Equity markets are trading straight down (Spain -3%, Germany -1.8%, etc); every European Equity market remains bearish TREND @Hedgeye.


3.   CURRENCIES/COMMODITIES – Dollar down small so far, and that’s not a good thing for US Equities (6mth correlation between SPY and USD = +0.76); Brent Oil is testing a breakout back above its $104.95 TREND line @Hedgeye this morning – any sustained close above that price could impose a sequential tax on global consumption in July-August.


Then of course you have Snowden banging around in Bolivia with Morales (or will they be dining in Vienna this evening?) as Obama fans try to put out multiple fires, including another delay on Obamacare.


What on earth could possibly go wrong?


They begged for (and obtained) a mandate for global central planning and now we’re going to have to deal with their mess. How much longer this can continue is anyone’s guess. All the while, there’s one mother-load of their sovereign debts we can short while we wait.


Under our new Global Macro Theme (that was born out of a Q2 one #EmergingOutflows) we are going to roll with emerging #DebtDeflation here in Q312. Yesterday we re-shorted the iShares USD Emerging Market Debt Bond Fund (EMB) and we’re looking forward to introducing a whole new bag full of short ideas in our upcoming Q3 Hedgeye Macro Themes Call. Basically, short politicians.


So if you can’t buy Sovereign Storyteller’s Debt – and you can’t buy Asian or European Equities, what’s left?

  1. US Dollars
  2. US Equities
  3. Beer, Wine, etc.

It’s a good thing US Equity markets close early today. You can get an early start on allocating some of your hard earned 2013 US Equity gains to option #3.


Since we have 26% of the Hedgeye Asset Allocation in US Dollars this morning and only 14% in US Equities (60% is in Cash, which means 0% allocations to International Equities, Fixed Income, and Commodities), we don’t feel like we’ll look entirely naked if the tide rolls out on our 1592 intermediate-term TREND line of support for the SP500 either (5 LONGS, 4 SHORTS @Hedgeye).


Buying anything US Equities is no way to live. Utilities (XLU) versus Consumer Discretionary (XLY) already has a +215 basis point performance spread for Q312 to-date (Utilities -1.28% vs Consumer Discretionary +0.87%). Don’t forget that #StrongDollar and #RisingRates punishes Yield Chasers, people investing in MLPs that can’t pay their dividend (LINE), etc.


As for Heaven and Power, and for the Moslem and Canadian out there that some American central planner wants to pass personal judgment on next, well – on this 4th of July, I’ll be betting on the men and women who will fight for their freedoms, all day long.


Our immediate-term Risk Ranges are now:


UST 10yr 2.41-2.63%



VIX 15.31-17.97

USD 82.78-84.04

Oil 100.22-104.95


Happy 4th of July, and best of luck out there today,



Keith R. McCullough
Chief Executive Officer


Heaven and Power - Bond Price Deflation


Heaven and Power - vp 7 3

Retail Ideas: Where We Stand on WWW, FNP, RH and NKE

Takeaway: Here's our financial overview of where we stand on our Best Ideas. Next up is the 'what can go wrong' analysis. Then some new Bench Ideas.

Here's an update on our key longs in 2013, most notable WWW, FNP, RH, and NKE. While style factors in the market will ebb and flow as it relates to liking small-cap, high-beta names with high short-interest (i.e. everything except Nike), the crux of our long-term calls on the names revolve on earnings, and how much the market does or does not respect the upside (or downside) relative to consensus.


This is an overview of our key calls, and a financial representation of where we're different from consensus.  Next, keep an eye out for more detailed reviews in the 'what could go wrong' department, which we think is critical at this point (so we avoid the dreaded 'round-trip').  Finally, look out for some new names that are currently sitting our idea bench. Enjoy the 4th.


Brian McGough 



1) WWW:  The Street is grossly underestimating the revenue growth opportunity as the legacy WWW scales its recently-acquired brands over its global infrastructure. Under its former owner, Sperry, Keds, Saucony and Stride-Rite only generated 5% of its sales outside of the US, and most of that was in Mexico and Canada. Legacy WWW, on the other hand, is the most global footwear company in the world (yes, even moreso than NKE and AdiBok), with 65% of units sold outside the US through an elaborate network of seamlessly-integrated third-party distributors. Given that the infrastructure is already in place, the incremental sales should be brought on close to a 20% incremental margin, versus 8% margin today. Similarly, minimal capital is needed on the balance sheet to grow these brands, making the growth trajectory over the next 3-5 years very ROIC accretive. The stock might look expensive at 19x earnings and 12x cash flow, but the street’s numbers are low by an incremental 10% per year. We're at $5.65 to the Street's $4.25 four years out.  We’d buy aggressively on a pullback, but are not so sure that will happen. We think WWW is a double over 2-3 years. It’s rare to find names like this.


Retail Ideas: Where We Stand on WWW, FNP, RH and NKE - www


2) FNP: One of the best growth stories in retail. The brand has an $800mm footprint today, but we can build up to at least a $2bn-$3bn footprint over 5-years. What's unique about Kate Spade is that it has a considerable growth runway in its’ existing US handbag business, but also in a) new categories like ready-to-wear, fragrances, eyewear and other accessories, b) new concepts like Kate Space Saturday and Jack Spade, and c) new geographies like Japan and China (already proven), and d) new channel growth opportunities with Outlet growth and e-commerce development.  One thing we like in particular about FNP is that Kate is sitting at an operating margin near 10%. Note that Coach and Kors are closer to 30%. We won't argue that Kate is Coach or Kors -- as its sales per square foot are 40% below those concepts (for now). FNP has been investing in Kate's infrastructure which it will leverage as the top line continues to grow. In other words, we're not very concerned about margins slipping at Kate. Quite the opposite, actually, as we think that margins will approach 20% within 5-years. In the end, we’ve got Kate Spade EBITDA going from $127mm this year to over $440 by year-5 of our model. In the interim, FNP should jettison Lucky and Juicy -- and have $350mm in cash left over after completely mitigating its debt burden. That should leave the company with about $2.25 in EPS power in year 5 based on our math. Spot-checking that math even more simply, let's use a $3bn revenue footprint and a 15% operating margin (maybe the rev is aggressive, but the margin is conservative). we get $450mm in EBIT. After 38% tax rate (which is likely to come down as Int'l % goes up) and 119mm shares, we get $2.35 in EPS. This puts the $22.50 stock price in a different light. We liked it at $5, we liked it at $10, and while we will be vigilant about overstaying our welcome, we still like it at $22.50.


Retail Ideas: Where We Stand on WWW, FNP, RH and NKE - fnp


3) RH: At risk of sounding sensationalistic after talking about the upside in WWW and FNP, we'll say that RH has a growth algorithm that is unparalleled in retail.  Having historically been a retailer that is held hostage to ebbs and flows in the economy and the home furnishings business through its undersized retail stores as well as its catalogue business, the company is dramatically expanding into new categories in the Home Furnishings space in which its current market share is zero. This includes RH Kitchens, RH Tableware, RH Antiques, RH Fine Art, and RH Objects of Curiosity, to name a few.  We're seeing square footage growth bottom out today while the company puts up comps in the +40% range. Then over the next three years, we're going to see square footage growth accelerate to close to 20% by our math at the same time comps will very gradually slow -- but still remain healthy as the new 25k-40k square foot Design Galleries (with sales/square foot between $1,000-$1,500) take the place of the existing 10k square foot stores (ss/ft $600-$800) and make up a greater proportion of RH's overall store base. In other words, the revenue outlook is becoming more stable, not less. Another angle… with the ability to show only 20% of its product to the end consumer, it’s been logistically impossible to showcase all its product offering.  We like to say it's like having a dozen Ferrari's but only a two-car garage. With the recent preannouncements and earnings release, the consensus has come a bit closer to our estimates, but we're still 50% ahead of the Street  in 2015. We think that the longer-term earnings power of RH is better than $5 per share ($3+ bn in sales, and a 12% operating margin). Like WWW and FNP, we'd love it on a pullback. But for now we can't point to one.


Retail Ideas: Where We Stand on WWW, FNP, RH and NKE - rh


4) NKE: Not the huge upside that we see in any other names above. But our estimates are 10-15% ahead of consensus for the next 3-years.  The chief concern most people tend to share with Nike is that the US business, which has been fueling Nike's bottom line, mathematically needs to continue to slow on the margin.   But keep in mind that we have proof that Europe -- both Central and Western -- has stabilized in this business, and we’re anniversarying a slowdown last year in China, and Emerging Markets.  In fact, the company already reported high single digit futures growth, which is in part due to better product pricing (nice tailwind). By the time we begin to lose visibility in the business, the event calendar heats up with World Cup in Brazil.  In the interim, inventories are growing at a lesser rate than both sales and futures, which adds to the bullish gross margin setup.  In all reality, Nike probably set a low bar with its earnings guidance. Our $3.17 for the year is about $0.15 above the Street. The only thing that could stop Nike at this point is Nike. With its current management transition of no fewer than half a dozen senior roles, there will definitely be uncertainty in the organization. But aside from the now infamous Bill Perez CEO year (2005/06) we've never seen a Nike management transition that did not work. It's one area where the company is flawless.


Retail Ideas: Where We Stand on WWW, FNP, RH and NKE - nke

LINE: The Battle Wages On

Takeaway: LINN Energy (LINE) remains overvalued. Our fair value estimates are more than 40% lower than the current stock price.

(Editor's note: The following excerpt comes from today's Hedgeye Morning Newsletter. If you would like more information on how you can sign up to receive these newsletters, please click here.)


“If someone picks on your brother and you don’t stand up for him, don’t bother coming home.”

-Larry Bird, quoting his father (paraphrased)


From a stock research perspective, the last couple of months at Hedgeye have been interesting.  Specifically, our Senior Energy Analyst Kevin Kaiser has been knees deep in a classic battleground stock: LINN Energy.  Kaiser has done an immense amount of independent work on the stock and concluded that the Company is overvalued.  In fact, our fair value estimates are more than 40% lower than the current stock price.


LINE: The Battle Wages On - linn


This research has raised the ire of the Company’s management who has publicly refuted our thesis, has led to numerous ad hominem attacks from the likes of Jim “The Entertainer” Cramer, and also led to a letter to the editor of Barron’s from a large hedge funds that has accused the short sellers of LINN to be “unprincipled”.  (Ironic from a hedge fund that routinely shorts securities.)


Now, admittedly, when we think we are on to something we tend to go all in.  In this instance, that included presenting on the idea a couple of times, participating in the Barron’s article, and publicly defending our research and our analyst.  To Larry Bird’s quote above, if you are not going to defend your ideas and your teammates, don’t bother coming back to Hedgeye headquarters.


Late last night, we were rewarded for our hard work as LINN Energy announced:


“… that they have been notified by the staff of the Securities and Exchange Commission ("SEC") that its Fort Worth Regional Office has commenced a private, non-public inquiry regarding LINN and LinnCo. The SEC has requested the preservation of documents and communications that are potentially relevant to, among other things, LinnCo's proposed merger with Berry Petroleum Company, and LINN and LinnCo's use of non-GAAP financial measures and hedging strategy.”


Now to be fair, this is America, and certainly the Company is innocent until “proven guilty” by the SEC, but nonetheless this was part of our point in warning investors that some of LINN’s practices were likely to attract the scrutiny of the SEC.


As always, though, Mr. Market will ultimately let us know if we are correct in our research on this name.  After all, in the short run the stock market is a voting machine and in the long run it’s a weighing machine.


Back to the global macro grind . . .


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This note was originally published July 02, 2013 at 06:20 in Restaurants

With the exception of Burger King, the Street is expecting a continued recovery in same-store sales trends for the biggest QSR chains in 2H13.  The following is a look at what each chain will be promoting for the balance of 2013 in order to drive incremental customers.



WEN - Wendy’s

  • Pretzel Bacon Cheeseburger – the national rollout of the summer LTO will begin by July 4th weekend in the U.S. and Canada and could potentially become a permanent menu item
  • Berry Almond Chicken Salad – returned at the end of May for its yearly appearance
  • Strawberry Tea and Strawberry Lemonade
  • Waffle Cone Frosty

HEDGEYE – Expectations are high for the Pretzel Bacon Cheeseburger.  The product is different enough to potentially generate significant trial.  The retail price for the burger is expected to be $4.69, which is an expensive burger, particularly when most consumers are looking for items with better value.  Given the extremely difficult comparisons in 2Q13 and 3Q13, management is relying upon the new burger to drive traffic and check.  Street expectations are for a 1.0% increase in 2Q13 same-store sales.  We believe that the turnaround at Wendy’s is going to take time.


Given that this recent run has been driven largely by multiple expansion rather than earnings revisions, we expect the stock to “take a breather” at this point.  Due to a lack of catalysts, it will be difficult for the stock to continue on its current trajectory.  We believe the next two quarters are likely to see choppy top line performance from WEN.



YUM - Taco Bell

  • Will continue to build on the Doritos Locos Tacos and Cantina Bell platforms
  • Cool Ranch Doritos Locos Tacos – expected to be a strong performer in 2Q13
  • Will release a third flavor of Doritos Locos Tacos “soon”
  • New Cantina Double Steak Quesadilla

HEDGEYE – Taco Bell is up against a 13% comparison from last year.  The trends in 1Q13 suggest that Taco Bell will be see same-store sales down by 1% in 2Q13 compared to Street expectations of a 1.3% increase.  While this might be slightly disappointing, it is insignificant relative to the poor trends the company is seeing in China.  YUM has underperformed the S&P 500 by 820bps year-to-date and it is our view that the company’s performance in 2Q13 will do little to change the Street’s perception. 



MCD - McDonald’s

  • New variations of the Quarter Pounder will replace Angus Burgers
  • New Egg White Delight option on breakfast sandwiches
  • McCafe Blueberry Pomegranate Smoothie
  • McCafe Dulce de Leche Shake
  • Premium McWraps

HEDGEYE – Despite all that MCD has going on, we don’t believe the company’s performance is going to match the lofty expectations embedded in the numbers for 2H13.  While expectations are reasonable for McDonald’s USA to post 1.6% same-store sales in 2Q13, we suspect that 3% same-store sales estimates for 2H13 are too aggressive.  We remain bearish on MCD.



BKW - Burger King

  • Soft Serve Cones – $0.50 item will be available through August 4th
  • New Summer BBQ-themed menu
  • New Rib Sandwich (reminiscent of the MCD McRib)
  • Return of the Memphis BBQ Pulled Pork Sandwich
  • Carolina BBQ Whopper
  • Carolina BBQ Chicken Sandwich
  • Return of Sweet Potato Fries
  • Buffalo Chicken Strips
  • Frozen Lemonade and Frozen Strawberry Lemonade

HEDGEYE – We do not see anything in Burger King’s new product pipeline that suggests the company will separate itself from others in a very competitive QSR landscape.  BKW is comparing against 4.4% same-store sales growth and we believe the Street estimate of a 1.4% same-store sales decline in 2Q13 is too conservative.  It is very possible that 2Q13 same-store sales could be down nearly 2%.  We continue to believe the fundamental issues in the business model and the cash flow pressure on franchisees will prove to be two major headwinds sometime in the future; in the meantime, however, positive restaurant industry and macro data continue to support the stock.



TRENDS: FAST FOOD'S BIG 4  - big 4 sss2



Howard Penney

Managing Director



Rory Green

Senior Analyst



Morning Reads on Our Radar Screen

Takeaway: A quick look at stories on Hedgeye's radar screen.

Kevin Kaiser – Energy

LINN Energy and LinnCo Voluntarily Disclose Informal SEC Inquiry (via LINN Energy)


Morning Reads on Our Radar Screen - radar


Keith McCullough – CEO

Manhattan Apartment Sales Increase Despite Reduced Inventory (#HousingsHammer via New York Times)

“Canadian National Canthem” (via YouTube)

Suicide bomber kills 22 in Iraqi Shi'ite mosque (via Reuters)


Daryl Jones – Macro

Oil Myths: The Hedgeye Rebuttal to Dan Dicker (Note: In light of Dicker’s support of Linn Energy. We thought we’d take a stroll down Memory Lane here … via The Reformed Broker)


Howard Penney – Restaurants

How a Pasta Chain Called Noodles & Co. Punked Wall Street (via Daily Beast)

Cracker Barrel Restaurant's Products Barred From Supermarkets (via Huffington Post)


Matt Hedrick – Macro

Italy Pushes $1,280 Silk Sweaters as Recession Cure (via Bloomberg)


Josh Steiner – Financials

Citi to pay Fannie $968 million in toxic mortgage deal (via New York Post)

BofA said to send appraisal reviews to India (via Charlotte Observer)


Jonathan Casteleyn – Financials

U.S. Banks Must Meet Basel Mark as Small Firms Get Easier Terms (via Bloomberg)


The details show that June was even better than the headline. July should be more of the same.



June GGR grew 21.1% YoY to HK$27.45 billion (US$ 3.54 billion).  We estimate that including direct play, VIP hold was 3.03% versus a normalized 3.00%.  With normal VIP hold in both periods, GGR growth would have been 21.7% (similar to what was reported).  We expect the +20% growth to extend into July.  


Our favorite names are MPEL and MGM, both of whom had solid months.  MPEL gained share due in part to higher hold but Mass growth of 65% led the market.  MGM's June was outstanding.  Mass, VIP volume, and slot share were all above normal.  GGR grew 41%, the highest in almost 2 years.  Wynn was a laggard with only 4% GGR growth and share about 70bps below recent trend.  Here is the detail.





Total table revenue grew 22% YoY.  Mass market growth continued its streak of around 30% growth rate, up 32% in June.  VIP volume and win rose 18%, the highest volume growth since January 2012.



Table win grew 33%, lead by 87% growth at SCC.  Mass revs remained strong at 55% while VIP RC grew 33%.  Including direct play, we estimate that LVS held at 2.8% in June compared to 3.1% last June, assuming direct play of 16% vs. 22% last year.  Four Seasons was the only property that held better than last June's.

  • Sands climbed 9%
    • Mass grew 30%
    • VIP revenue fell 5%
    • Sands held at 3.1% vs 3.4% in the same period last year.  We assume 11% direct play in June vs 9% in June 2012.
    • Junket RC grew 4%, ending a three month losing streak 
  • Venetian grew 28% 
    • Mass increased 35%
    • VIP revenue grew 21%
    • Junket VIP RC gained 40%, largest growth since May 2011
    • Assuming 27% direct play, hold was 3.3% compared to 3.8% in June 2012, assuming 28% direct play 
  • Four Seasons lost 2%
    • Mass revenue declined 33%
    • VIP revenue grew 7% but Junket VIP RC declined 5%. June hold (assuming 11% direct play) was 2.6% vs 2.2% in June 2012 when direct play was 16%.
  • Sands Cotai Central rocketed 87% higher
    • Mass jumped 186% to $96MM, a new monthly high 
    • VIP revenues grew 47% 
    • Junket RC volume of $4.4BN, up 87% YoY 
    • If we assume that direct play was 11%, hold would have been 2.5% 


MPEL had a solid month, lobbing in the 2nd best table growth of 38%.  Mass continued to be white-hot at 65% (1st in the market) while VIP growth was 29%. We estimate that MPEL held at 3.22% vs 2.83% last June.  Estimated direct play was 10% in line with last year.

  • Altira table revenues grew 18%.  Mass rose 14% while VIP saw a 18% YoY increase.
    • VIP RC was flat
    • We estimate that hold was 3.4%, compared to 2.9% in the prior year
  • CoD table revenues grew 47% YoY
    • Mass increased 72%, continuing its impressive streak of strong YoY double-digit gains since the property opened
    • VIP win grew 46% and RC grew 25%
    • Assuming a 14% direct play level, hold was 3.1% in June compared to 2.8% last year (assuming 15% direct play)


Wynn table revenues grew 6%

  • VIP revenues grew 9%, while VIP RC increased 6% 
  • Wynn held at 2.9% vs 2.9% last June
  • Mass revenues fell 3%, the 1st drop since June 2012


MGM had the strongest performance in June, growing 44% in table revenues. 

  • We estimate that hold was 3.1% adjusted for direct play of 7% vs hold of 3.4% last year assuming 9% direct play
  • VIP RC and Mass grew 64% and 37%, respectively


Galaxy was the laggard in June with tables revenues growth of 6%. VIP RC had the worst market performance, only 3% gain.  On the bright side, Mass growth was strong at 41%.  Hold was 3.3% in June 2013 vs. 3.6% last year.

  • StarWorld table revenues rose 6%
    • Mass soared 49%
    • VIP gained 1%.  
    • Junket RC rose 7%
    • Hold was 3.3% vs 3.5% last year
  • Galaxy Macau's table revenues grew 5%
    • Mass had another great month at 45% growth
    • VIP saw a 3rd consecutive decline at -5% but RC rose 2%
    • Hold was 3.3% vs 3.6% last June


Total table revenue grew 18%, with mass and VIP growth of 6% and 25%, respectively. RC volume also gained 16%.  SJM held at 2.9% vs 2.7% last year.



SEQUENTIAL MARKET SHARE - May to June (property specific details are for table share while company-wide statistics are calculated on total GGR, including slots):



Market share lost 50bps to 20.5%.  June’s share is below its 6-month average of 21.1% and better than its 2012 average share of 19.0%. 

  • Sands' share gained 70bps to 3.5%.  For comparison purposes, 2012 share was 3.9% and 6M trailing average share was 3.2%.
    • Mass share dropped 50bps to 5.4%
    • VIP rev share increased 120bps to 2.7%
    • RC share was 2.4%, +20bps MoM 
  • Venetian’s share fell 70bps to 7.8%.  2012 share was 7.9% and 6 month trailing share was 8.4%.
    • Mass share decreased 90bps to 13.5%
    • VIP share lost 60bps to 5.4%
    • Junket RC share was unchanged at 3.9%
  • FS gained lost 150bps to 2.2%.  This compares to 2012 share of 3.7% and 6M trailing average share of 3.2%.
    • VIP was lost 200bps to 2.7%
    • Mass share fell 50bps to 1.0%, matching an all-time low
    • Junket RC lost 110bps to 3.0%
  • Sands Cotai Central's table market share gained 90bps to 6.4%, which compares to the 6M trailing average share of 5.9%.
    • Mass share improved 120bps to 9.4%, a new high
    • VIP share climbed 0.8% to 5.2%
    • Junket RC share grew 50bps to 6.0%


MPEL grew 60bps in share in June to 14.6%. Its 6 month trailing share is 14.1% and their 2012 share of 13.5%.  

  • Altira’s share was unchanged at 3.8%, in-line with its 6 month trailing and 2012 shares
    • Mass share lost 20bps to 1.1%
    • VIP gained 20bps to 5.0%
    • VIP RC share fell 70bps to 4.5%
  • CoD’s share rose 40bps to 10.6%, above the property’s 2012 and 6M trailing share of 9.4% and 10.2%, respectively.
    • Mass market share slipped 10bps to 12.4%
    • VIP share gained 60bps to 9.8%
    • Junket share dropped 60bps to 8.7%


Wynn was the largest share loser in June after rising the most in May.  GGR share was 10.2%, down 180bps MoM.  2012 average share was 11.9% and their 6M trailing average share has been 11.0%.

  • Mass share was fell 100bps to 6.3%
  • VIP share tumbled 210bps to 11.8%
  • Junket RC share dropped 50bps to 12.0%


MGM’s market share dropped 30bps to 11.0%, but still above its 6M and 2012 average of 9.9% 

  • Mass share gained 20bps to 8.0%
  • VIP share dropped 70bps to 11.9%
  • Junket RC slipped 10bps to 11.7%


Galaxy's share gained 0.5% to 19.3%, above its 2012 average and 6-month average share of 19.0% and 18.3%, respectively

  • Galaxy Macau share improved 90bps to 10.9%
    • Mass share gained 20bps to 10.6%
    • VIP share improved 120bps to 11.1%
    • RC share gained 100bps to 10.7%
  • Starworld share lost 20bps to 7.6%
    • Mass share gained 20bps to 3.6%
    • VIP share dropped 30bps to 9.3%
    • RC share lost 50bps to 9.0%


SJM gained 160bps to 24.5% (which was an all-time low), but still below their 2012 average of 26.7% and their 6M trailing average of 25.6%

  • Mass market shares gained 180bps to 26.5%
  • VIP share gained 170bps to 24.5%
  • Junket RC share rose 190bps to 27.5%


Slot Revenue


Slot revenue grew 12% YoY to $139MM in June

  • LVS had the best YoY growth at 36% to $45MM
  • MPEL grew 25% to $28MM
  • MGM gained 13% to $25MM
  • GALAXY rose 6% to $14MM
  • SJM dropped 8% to $13MM
  • WYNN had the worst YoY slot performance, tumbling 27% to $14MM


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