It has been a heck of a breakout for Las Vegas Sands (LVS) out of the consolidation phase under $33 noted on Sep 22 [Nice Base Building in Las Vegas Sands]. The stock has put on nearly 20% in 2.5 weeks… and now trades at FORWARD 53x earnings for 2010. Even on 2011 estimates (15 months away) it’s a forward 35. Don’t even ask what the trailing PE is. But like the Greenspan “Y2K” era, we’re back to not caring about valuations because the central bank is flooding the world with paper currency… although Bernanke is putting Greenspan to shame. While LVS has perhaps the most appealing portfolio of geographic distribution (duopoly in Singapore, exposure in Macau) among the casino names, this is the type you ask where does it end? If 53x forward earnings, why not 106x? 212x? 424x during QE5? I obviously have no idea but I guess we simply hold on for the ride since we are in the “can’t lose market”.
Disclosure: Long Las Vegas Sands in fund; no personal position