VEGAS BABY YEAH? NO?

Takeaway: The Strip’s recovery is not very deep or sustaining

CALL TO ACTION

It’s almost the anti-Macau play but not really:  Buy MGM because the company has less Macau exposure.  How about buying something without any Macau exposure? I suppose the best way to play the Strip would be to buy MGM and short 2882.HK.

 

So let’s look at what you’re getting if you could isolate Strip exposure. Solid RevPAR growth? Yes, but if you’re looking for that why not buy a hotel stock like HLT or HOT. Las Vegas RevPAR has actually lagged the rest of the country.  Gaming revenue growth?  Outside of Baccarat we’ve seen very little actually.  And the 2nd derivative in Baccarat went negative in August and the 1st derivative turned in November.

 

Unlike Macau, Las Vegas is at least stable.  Stability is hardly an investment thesis, though.

 

Please see our detailed note: 

http://docs.hedgeye.com/HE_Vegas_2.5.15.pdf


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