We are removing LVS Short from the Hedgeye Best Ideas list. We’ve been negative on the Macau stocks and LVS since February and acknowledge that signficant risks remain over the intermediate (trend) term. However, investor sentiment may have bottomed. We sense potential investors may be chomping at the bit to buy Macau at a perceived discount following the Chinese President’s visit tomorrow and the release of what is generally known to be awful revenue figures for December. Thus, there appears to be increasing probability of a relief rally in the Macau stocks and while that’s not a great investment thesis, it is enough for us to recommend investors take profits in what has been a profitable short call.
Significant risks are prevalent and we remain significantly below the Street for Q4 and 2015 estimates for LVS and the other Macau stocks. Stay tuned.