Below is a brief note from CEO Keith McCullough explaining why we're adding Melco Resorts & Entertainment (MLCO) to the long side of Investing Ideas today:
In addition to the US growth and profit cycle #accelerating, another big @Hedgeye Research Call has been that Macau Gaming is #accelerating in Q417. Wynn Resorts (WYNN) is still in our longer-term INVESTING IDEAS product, and today I'll signal #oversold in Melco Resorts (MLCO).
Here's our Gaming Ace, Todd Jordan's, recent commentary on Macau:
"Once again, Macau seems to be exceeding estimates, this time for November. Week 2 accelerated from the strong start and even we are raising our November forecast, despite being higher than most. The casinos may have played a little lucky in VIP on the Peninsula but volumes were also apparently strong. Mass seems better than in October, possible due to an easier (we think) comparison. Consensus expectations for November and Q4 still look too low and the Street will have to play catch up, again. The formula of GGR beats = EBITDA beats = higher Macau stock prices should continue."