We Are Removing Melco Resorts (MLCO) from Investing Ideas

"Last week, revenue growth slowed from the strong start to March.  While still strong (+20%), the comps do get more difficult to close the month so we’re anticipating a further slowdown.  However, overall trends remain strong and we believe GGR will exceed current Street expectations.  Mass revenue growth was likely higher than forecasted month to date which should translate into another strong earnings season next month.  We remain positive on the Macau stocks as valuations appear reasonable, estimates are conservative, and some very compelling visitations trends suggest a long tail of growth.

For MLCO, the secular margin story is intact despite falling short of our expectation in Q4 2017.  Q4 2017 margins at CoD were impacted by the closing of House of Dancing Water for one month and higher property costs.  The management shuffle should turn around recent weakness at CoD.  The Q2 (possibly May 10^th) opening of the Morpheus Tower is a catalyst and should generate meaningful incremental EBITDA growth.  MLCO is the cheapest in the group, yet cash flow will accelerate post Morpheus and set up a big shareholder capital return and/or a value enhancing buyout of the MSC minority partner."