Hold: Melco Crown Entertainment
Melco Crown Entertainment (MPEL) is up 130% over the past 52 weeks. With the exception of its City of Dreams development in Manila, all of MPELs properties are in Macau. A majority of its revenue and adjusted property EBITDA is generated by its City of Dreams property in Macau.
In the first nine months of 2013, City of Dreams Macau generated adjusted property EBITDA of $846 million, or 86% of its overall total. It’s the engine that drives this bus, growing 44% year-over-year.
One of the major beneficiaries of a booming Macau is James Packer, an Australian billionaire who gambled $600 million on his 33.65% joint-venture interest in MPEL in 2005, which is now worth $6.4 billion and growing. I think it’s safe to say that Packer won’t be selling anytime soon.
Given MPEL’s strong four-year run, averaging an annual total return of 80%, investors who have been along for the ride might want to consider taking some profits. However, I wouldn’t unload your entire stake because it looks to have some more room to run.