Melco Crown Entertainment (MPEL) - Daily Digest

Posted on 06/14/2012 by Jane Lacave


NEW YORK (AVAFIN) -- Block trades serve as a useful indicator for investors trying to understand the sentiment of large financial institutions. Today, a total of 21 block trades were recorded, typically at least 10,000 shares of stock or more represent a single block unit. Further examination shows that the bought value of the shares was $3,281,909 versus the sold value of $1,102,379. The positive cash flow of $2,179,530 into the stock shows that investors have bullish sentiment.

A deeper look into options trading also reveals that traders hedged their positions with options where 3,844 put and 16,579 call contracts exchanged hands leading to a 0.23 put/call ratio.

The company relies heavily on lower-margin VIP rolling chip customers who generate more than 75% of revenue. In the past, the VIP market has been more sensitive to changes in economic and credit conditions in China than the mass market. Additionaly, Melco is overleveraged for a company with high fixed costs and results that are closely tied to economic conditions and the whims of the Chinese central government. While the short-term outlook is positive, a major slowdown in Chinese GDP growth could lead to volatile results and even potential distress in meeting its debt obligations.

Melco Crown Entertainment, Ltd. is a holding Company, which through its subsidiaries, develops, owns and operates casino gaming and entertainment resort facilities focused on the Macau market.

MPEL is trading below the 50 day moving average and lower than the 200 day moving average. Shares of Melco Crown Entertainment closed at $11.24, down $0.51 (4.30%) in the last trading session. Today's volume of 8M shares is greater than the average volume of 7M shares.

Market Snapshot (06/14/2012)
  SPX 1329.33 14.45 1.10%
  DOW 12653.2 156.80 1.25%
  NASDAQ 2836.33 17.72 0.63%
  VIX 21.97 -2.30 -9.48%

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