With its share price up 3% year to date, Melco Resorts (NASDAQ: MLCO) has dramatically outperformed the S&P 500 index , which has fallen 20% over the period. That said, the company is far from a safe investment.
Let's explore why regulatory uncertainty in China and weak financials could cause the casino operator to underperform over the long term.
Founded in 2004, Melco Resorts is a Hong Kong–based casino and resort operator. It focuses on the Asian market, with its largest properties in Manila, the Philippines, and Macao, China -- a city that was the gaming capital of the world before the COVID-19 pandemic. Like all tourism hotspots, Macao faced a catastrophic dip in arrivals during the crisis. But unlike other destinations , such as Las Vegas, it has been very slow to recover. Melco's third-quarter results highlight the severity of the problem.
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Up 3% During a Rough Year, Is Melco Resorts Stock a Buy?