Melco Crown (MPEL) continues to have the best fundamentals of the major Macau casinos, and the new Studio City can make those fundamentals even better. Of course stock values no longer reflect fundamentals anymore since loose money has turned investing into a casino itself. Luckily one can track how loose money is at any given time in order to make adjustments. My contention remains that whenever Macau does bottom, which it may have already done, Melco’s stock will be the fastest long term gainer in Macau.

This has proven to be the case so far. Ever since that faux announcement of “help” from Beijing, Melco is up 42%, Galaxy 34%, Las Vegas Sands 33%, and Wynn 36%. On the way down it was the second best performing of those four behind LVS, which isn’t saying much though because it still lost two thirds of its peak value. From the March 2014 top to now, LVS is still winning by 13 points, but that should change if the final bottom is in, and Melco should overstake LVS in terms of stock gains in the next year or so.

As a reminder, last year I wrote:

As good a company as Melco Crown is, its stock price will not escape the surrounding environment. Its bottom line may not even suffer that much compared with the competition, but during economic resets that is secondary to beta volatility. Once the reset is over, Melco will be among the survivors, stock price beaten but company alive. It is then that its superb management will really shine.