Although the consumer market has had a pretty mediocre year, the gaming sector has actually done pretty well and is one of the sectors leaders. The space,
as represented by the gaming ETF (BJK - Free Report) , has gained about 15% this year which easily outpaces the
consumer discretionary sector at large for the time frame.
This may come as a bit of a surprise to some investors, but if you consider the stronger economic trends in place in the domestic economy, then it becomes
less of a shock. Lower rates of joblessness, slightly stronger wage growth and booming consumer confidence are all combining to make consumers feel a bit
better about their situations as of late, which is great news for the gaming market. No wonder the industry currently has a top 25% industry rank and is poised for more gains in the
However, the real winners in this space also have big foreign operations, as the Chinese market is seemingly back on track after months of worry over a
dreaded hard landing in the country. But that has not come to pass and investors are quickly embracing companies with big exposure to consumers in this
These factors make for an excellent environment for companies like Las Vegas Sands (LVS - Free Report) which not only
has a big domestic presence, but has significant holdings in Asia as well. That is part of the reason why LVS has been able to thoroughly crush not just
the consumer discretionary sector, but the gaming space at large too so far in 2016.
But although LVS has surged for much of 2016, it may actually have plenty of room left to run higher. This is evident if we look to recent earnings
estimate revisions from analysts who track the stock.
Shares of LVS have seen nearly universally rising estimates over the past thirty days, including six estimates higher for the current quarter compared to
zero lower, and then seven higher for the current year compared to zero lower. These moves have also had a big impact on the consensus estimate for Las
Vegas Sands, pushing this key metric to fresh highs.
In fact, the current quarter consensus estimate has increased by nearly 8.5% in the past thirty days, and the current year consensus estimate has added
6.85% in the same time frame. Meanwhile, the long term picture is also looking more impressive, as the consensus estimate for the following year has
increased by about 7.6% in the past month too.
If investors also add in the companys recent earnings beatin which they beat estimates by about 22%-- it becomes clear that LVS has a promising
trajectory in its near future. No wonder the stock has earned itself a grade of B for momentum, and a Zacks Rank #1 (Strong Buy) rating too.
Other Factors: Macao Expansion
But beyond these promising numbers, investors should also note that Las Vegas Sands just had the debut for a massive expansion to its Chinese operation,
the Parisian Macao. This new expansion adds another 3,000 rooms to its Chinese division, along with about 450 table games and 2,500 slots/electronic table
In just the first few weeks of the propertys operation, it saw $1.1 million in adjusted EBITDA per day and occupancy of 87.5%,
according to Las Vegas Sands company statistics
. And with Las Vegas Sands Macao division seeing about 15% growth y/y in adjusted property EBITDA for the most recent quarter, it looks like this market
is surging back, making this an optimal time to launch a new expansion, something that should benefit investors for months to come.
The overall market appears to be very strong for the gaming industry, both at home and abroad. The domestic economy strength is underpinned by a more
optimistic consumer, while a Chinese economy that is expanding at a robust clip with a growing manufacturing sector is keeping the bears at bay for that
This makes for a great environment for companies like LVS which has exposure to both countries, and we have seen that in the companys share price as of
late too. But with a solid economic picture, a recent earnings beat, and a new casino that just opened in Macao, this appears to still be a solid bet to
close out the year, and into 2017 as well.
Now, which stocks should you sell?
As a Zacks Rank #1 Strong Buy, this Bull of the Day deserves consideration. But today there are 220 Zacks Rank #5 Strong Sells that demand even more urgent
attention. If any of these are lurking in your portfolio, you should consider removing them immediately. Since 1988, such stocks have actually performed
more than 11X worse than the S&P 500.
See all Zacks Strong Sells and Strong Buys absolutely free >>