Cambodia’s gaming market is unlike any other in the world. As a monopoly with easily identifiable risks, until this year it was basically a unipolar investment in Nagacorp almost entirely dependent on tourist flows from China to Phnom Penh. The more people that come to Cambodia, particularly megarich Chinese VIPs, the more money Nagacorp makes. As long as the tourist flows keep increasing, the value of the stock would rise, and so it has. Up 216% since June 2017 and 30% year to date, the stock is on fire. It looks much more risky now than the last time it was covered here.

Back in 2015 I called it a good 5-year hold for a small position:

Overall, NagaCorp is a good pick for a small position as a long term investment, say a 5 year hold. You’ll get high dividends, possibly a nice chunk of capital growth, but positions need to be slowly scaled in on dips.…NagaCorp should grow nicely from 2016 through 2020 as it absorbs more of the Macau junket market and expands. Just keep an eye on the monopoly issue, which shouldn’t become a problem in the foreseeable future, but is something to keep an eye on.

 It’s now 4 years later, the stock has climbed 62% plus dividends totaling 62 cents a share since then on what was around an 82 cent stock. That’s an additional 76% income gain. Looking at the risk concentrations here, profits should be taken on half of the position at least and stops placed for the rest. While it is true that Nagacorp risk has been diversified thanks to its opening up business in Russia later this year, in many other ways risks have increased significantly in its main Cambodian market, which is primarily the Chinese VIP market, primarily. This market could keep growing thanks to continued tourism growth, but the tailrisk is large enough to lock in profits and seek other opportunities.