I try to make all of my investing decisions using a similar methodology or reasoning as those investors that I respect or believe have an intricate knowledge of the company in question. So, when I see a number of quality analysts writing similarly upbeat reports about a company on my watchlist, that just happens to have a multi-billionaire at the helm, I take note.
A Top Growth Stock
In this case, the company in question is Crown Resorts Ltd (ASX: CWN). Crown is run by executive chairman and major shareholder James Packer. Mr Packer, whose net worth stands at $6.6 billion by current estimates has a very successful investing history, taking early stakes in internet groups SEEK Limited (ASX: SEK) and Carsales.com Limited (ASX: CRZ) among other wise investments.
His leadership of Crown has taken the company from an Australian-based casino group towards amassing a portfolio of Asian-focussed gaming and resort assets.
Current Assets
In Australia, Crown currently owns and operates the sole casinos in Melbourne and Perth, dominating the respective markets as well as offering integrated hotels at the sites respectively.
Crown also has Crown Aspinall's in London, which appeals to higher-end guests but provides only a small percentage of group earnings.
Arguably the most important asset in Crown's portfolio is the company's 33.6% stake in Macau-based casino group Melco Crown Entertainment Ltd (NASDAQ: MPEL). The stake, which was purchased for $600 million in 2006, is now worth $6.3 billion and contributes nearly half of the group net profit and over half its market capitalisation.
Melco Crown's assets include the flagship City of Dreams casino resort in Macau, as well as two smaller projects under construction at Macau's Cotai Strip and in Manila.
Growth Opportunities
I can't find many companies with a better defined growth outlook and potential. Crown is investing in a new Sydney Casino, due in 2019, a new casino in Sri Lanka, with details to be finalised, and is working closely with the Japanese authorities to develop a resort once gambling restrictions are lifted.
There is also the potential for an acquisition in the US and Melco Crown is planning to open City of Dreams Manila later this year and Macau Studio City in Cotai by 2016.
The Low-Down
Overall, Crown is a play on Asian tourism, both incoming and outgoing, and on the greater Asian economy. One would expect that should China's growth dramatically slow or another global crisis hit Crown will suffer, but if the global economy continues its current trend, Crown is very well placed to benefit over the medium to long term.
