Morning Report Monday 5 May 2014
** Westpac (WBC) increases its 1H Cash earnings by 8% to $3.77B – broadly in line with estimates**
The gaming revenue from six casino operators in Macau, the world's biggest gambling hub, rose 11% in April compared to analysts' median estimates of a 7% increase. Not ideal news after being stopped out of my Crown (CWN) position recently for breakeven around $16.40, however, investing needs to maintain sensible risk / reward and hence stops. I remain upbeat on Crowns future assuming the China story continues at a reasonable pace. Simply put, the Chinese love to gamble. Also, Crown looking at struggling assets in Las Vegas interests me; if the US picks up as economics are implying, Vegas valuations will rise. Americans are not going to fly to Macau. The potential to get long again at lower levels remains as Crown continues to be one of the most loved stocks by investors, removing a number of potential marginal buyers as people are clearly already invested.
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