There are only two ways to score huge gains. Find a stock that is relatively unknown, and build a position before the crowd arrives. Or find a stock that is widely known, but widely loathed. In the case of Melco Crown Entertainment Ltd. (Nasdaq: MPEL), the first scenario has already played out, and the second scenario is just coming into play. When I first looked at this Macau-focused casino operator, shares were trading under $5. I looked at this stock a few years later when shares traded at $18 and noted considerable remaining upside. Shares eventually moved above $35. This… Read More
There are only two ways to score huge gains. Find a stock that is relatively unknown, and build a position before the crowd arrives. Or find a stock that is widely known, but widely loathed. In the case of Melco Crown Entertainment Ltd. (Nasdaq: MPEL), the first scenario has already played out, and the second scenario is just coming into play. When I first looked at this Macau-focused casino operator, shares were trading under $5. I looked at this stock a few years later when shares traded at $18 and noted considerable remaining upside. Shares eventually moved above $35. This stock’s meteoric rise was due to the fact that few investors knew about the company in 2010. Even as it gained adherents in subsequent years, many investors underestimated the powerful cash flow potential on Melco’s business model. Back in 2010, Melco Crown generated around $90 million in operating profits. By 2014, that figure had grown to $685 million. Yet Melco Crown, along with other Macau-focused casino operators, is now making headlines for different reasons. A sharp crackdown on corruption in China has led many Chinese high rollers to stay close to home, avoiding any appearance of conspicuous consumption. And as… Read More