Is Crown Resorts Ltd in trouble?

Crown Resorts Ltd's (ASX:CWN) massive slowdown in Asian revenue could spell trouble!

Andrew Mudie

Andrew joined the growing team of Motley Fool freelance writers in mid-2013 following years of personal development as a passionate self-taught sharemarket investor. At the time, Andrew was an engineer by trade, writer by hobby, and an investing nerd by passion who spent far too many breaks reading, writing and learning. Andrew’s first investing lesson came with his first stock selection in 2011 when takeover rumours caused a spike and subsequent plunge in the share price of Woodside and then the 21% fall in the market through mid-2011. The next four years of investing saw Andrew dabble in a vast array of strategies until settling on his favourite investment methodology, which is closely aligned with that of the Motley Fool: Fundamentals-based long-term buy-and-hold of great companies at great prices.

Published April 13, 2015 5:27 am AEST

What? Crown Resorts Ltd (ASX: CWN) received more bad news from its Macau-based joint venture Melco Crown Entertainment Limited last week when the monthly data was released that showed a 39.4% decline in gaming revenue in the month of March and a 35% fall over the first three months of the year.

So What? It seems that analysts actually aren't that concerned. The results came broadly in-line with expectations and a number of analysts have commented that the fall might actually be a GOOD thing because it will re-base figures on the sustainable long-term demand of middle-class consumers.

What Now? Long-term investors will know that Crown and Melco Crown have two of the strongest growth pipelines of any global casino groups. While the assumptions surrounding these expansions are just that, the global gambling market is expected to continue growing for many years yet and Crown is in a prime position to benefit.

The slowdown in Macau is troubling, and it's had a severe impact on the share price over the last 12 months, but most professionals are of the opinion that it'll work out in Crown's favour over time.

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