1. JohnMullin
Finc314
Project1.B
General Data:
Fama-French
DATA FROM JULY2008 TO PRESENT
Alpha
WYNN 0.390
CCL 0.029
880 HK 1.339
MAR 0.151
HOT 0.334
Regression: BasicP/E, BasicP/S, BuffetP/B
Last Px Pred P/E Targ Px Pred. P/S Targ Px Pred. P/B Targ Px
WYNN 139.91 61.89 188.16 1.13 19.84 4.88 31.96
CCL 32.22 -38.25 -92.17 3.50 138.04 1.67 2.15
880 HK 18.64 15.90 1.42 2.12 40.08 6.57 33.66
MAR 29.5 64.95 88.33 1.39 1.98 7.04 72.50
HOT 46.84 122.11 324.81 1.25 41.27 3.75 14.65
WYNN CCL MAR HOT 880 HK
Recommend StrongBuy and
Hold
Short Sell StrongBuy and
Hold
WeakBuy TBD

2. WYNN
WYNN has provenitself asa strong buy andholdstock since itsrecoveryfromthe 2008 marketcollapse,
thisstock moveswith the market. Since the recession the companyhasreboundedsteadily andhas
nearlytripledinvalue fromits1st
quarter2009 value.The upwardslopingtrendof the graphdepicts
findingsfromthe FamaFrenchregression thatWYNN hadpositive alphasince itsseverelosses fromthe

3. downturnof 2008. The P/Eregressionpredictssubstantial growthpotential fromWYNN pricingthe
securityat $50 above itscurrent value to$190. However,the P/SandP/B Buffetindicate otherwise.
These tworegressionsprice the securityatroughly%15its’ currentvalue implyingapossibledisconnect.
The book value pershare onWYNN isabout $20, $10 lessthanthe BuffetROEP/B regressiontarget
price yetthe stock is currentlytradingat $140. It is clearlyoverpricedwhensimplyconsideringthe gross
assetvalue of WYNN but froman earningsgrowthpotential standpointitisprettyattractive,given
stable or bettermarkets. WYNN’scurrentLongtermannual EPS growthrate isestimatedbetween45%
and 65% makingit the 2nd
fastestgrowingcompanyinitssector (CITE1). Itis obviousthatWYNN can
sustaingrowthinpoor to mildeconomicgrowthconditions,makingfuture prospectsof earnings
potential brightinastable andboom economy. Irecommend“BuyandHold” on WYNN,lossesonthe
stock have beenshorttermwashesandthe company’sassetswouldbe relativelyattractive fora
potential takeover. Beingthe owner/operatorof itscasinosprovidescashflow duringrecessions
withoutintensive reinvestmentandthe company shouldhave the bargainingpowerforahighvalue in
the eventof a buyout.
CCL

4. Thoughnot quite asstrong as thistime lastyear, CCL is a “BUY”, butonlyfor a limitedtime soaShort
Sell maybe the bestoption. Netincome forthe Cruise conglomerate ishighlyseasonalwithNOI
skyrocketingto4 timesoverduringthe 3rd
quarter of 2010 at $1.3 billion. Itisa companyyouwantto
keepaneye on though. CCL has lowassetturnoverforthe industryat 40% and profitshave been
decliningsince 2008. The companyisn’thighlyleveragedwhichisgood andhasmany subsidiarycruise
linesinniche marketsthatitcouldliquidate forcashinthe eventof an unlikelycrises. The regression
data on CCL isextremelyscatteredsojudgingfromahistorical dataperspectiveandgiventhe factthat
the cruise line isabove waterIwouldrecommend,BUYCCL in Septemberandsell itoff byor aroundthe
end1st quarter of 2011 or simplyshortitat thissame time. Aninvestorcouldprobablyrepeatthis
processannuallybutgiventhe lowalpha,.029, there are better“buyand hold”options.

5. MAR
MAR is one of the largestinternational hotelandluxuryreal estate conglomerates. BuffetP/B
regressionindicateanundervaluedstockasdoesthe P/Eregression. P/Sregressionpredictsand
overvaluedstockbutthatmay be attributable tolow unitprofitmarginsasa resultof a downeconomy.
MAR is currentlytradingaround$30 but has hoveredarounddouble thatforthe last10 yearswiththe
exceptionof 2007-2008. It has a decentalphaat .15 andis operatedbythe grandsonof the founder
whostartedthe companya centuryago and hasbeenmaintainingstabilityandmoderate expansion
throughthe recession. A companyof thissize has slowergrowthrates butismore stable. Pricesare

6. unlikelyskyrocketorplummetsoI wouldrecommend“weakbuyandhold”. The companycurrently
lookslike asleepinggiantandismost likelysellingata discount,greatfor highnetworthinvestors
lookingforreliablecompaniesinhibernation.
HOT
HOT is a companyyoungeryetcomparable toMAR withlessstabilityandlessmarketshare. Ithasan
alphatwice that of MAR but Price to Bookratio of half that of MAR so the returnsare offsetlessof a

7. confidence levelinthe company(ifprice tobookratioisany signof investorconfidence).Profitmargins
are far more volatile thanMARreachingnegligiblerates3timessince 1/2008 andthe weeklyPut/Call
ratiois out of control comparedto any of its top4 competitors. Regressionsrange fromgoodtobad as
the P/E regressionshowspotentialhighreturnsof anunderpricedstock,P/Bpricesitat close tomarket
but still asell andBuffetP/Bvaluesthe stockas vastlyoverratedand toorisky. I recommendthisstock
as a buy and holdwitha stoplimitsell fortworeasons. HOTis indirectcompletionwiththe much
larger,more powerful MARthatis likelytodonothingbutexpandorcomfortablysitonitslead. But,
HOT is investingheavily,upto20% of certainsubsidiariesinemergingmarketsof the Middle Eastand
China(CITE 2). Holdingthisstockcouldpayoff big inthe eventof a buyouta decade downthe line and
it’snot likelytoevaporate onamomentsnotice. “Avoidorsell forrisk-averse investors,Buy foryounger
investors”.
880 HK

8. (Graph isin$US) US $1 = HK $7.81)
Both P/SregressionsandBuffetP/Bprice 880.HK as undervaluedby HK$22 and HK$15 respectively.
Enormousprofitsare representedinthe alphaof the companywhichstandsat 1.339. 880 HK isthe
largestgrossingcasinointhe world,locatedinMacau, China. Evenwiththe potential forexcessive
returns,I wouldonlyrecommendabuytothe riskyportionof the emergingmarketssectorof a
portfolio. Lackof transparencyand the fact that the companyis still initsinfancyshouldkeepaverage
investorsgunshyon880 HK. “Buy and Holdwitha small percentage of the portfolio”andslowly
increase asthe companymaturesand produces“verified”income statements andbalance sheets.
Macau isa special economiczone withinChinawithpotential forcompanieswithhuge returnsbut
scrutinybeyondmathematicalanalysisshouldbe soughtbefore furtherinvestment. ThisisaJohn Daly
Buy.