Unlock: MGM Resorts (MGM) – Strong Channel Checks Translated into Good Earnings

It pays to do fundamental research. Here is bullish view we presented to clients on October 28 on MGM based on strong channel checks. Stock is guided higher by +5% in pre-market, set to open at new 52-week high. To learn more about our approach and how you can become a successful trader, sign up for 2 week trial and test drive live chat room with some of the best traders: SUBSCRIBE

October 28, 2016

MGM Entertainment (MGM) – Separately, I want to show a piece of research I was reading at 1:00 am ET this morning LOL (what can I say, I love what I do and I have half insomnia). MGM will report earnings on November 7. Last quarter MGM set itself up with high bar of expectation when they guided +7% RevPar growth (note MGM is still mostly Las Vegas based driven casino operator, not as much exposure in Macau yet but a new property is coming there next year). Will they meet that high bar of +7% RevPar when it reports? I think so and the stock should breakout on it.

Channel Checks – September Las Vegas Strip RevPar came in very strong at +11.6%, which is now concluding Q3 consolidated RevPar of +12.1%. That is way beyond expectations. Occupancy increased by +200 bps and average daily room rate increased by +9.3%. Las Vegas airport traffic shows total air passengers increased by +7.3%. The Nevada Gaming Board shows the traffic on Interstate Highway 1-15 at the Nevada / California border increased by +2.2%. Convention attendance increased by huge +16.2% and total number of business meetings was up +8.4%. This was due to three main conventions: G2E Conference, MINExpo which had 44,000 attendees and Solar Energy Trade Show with 18,000 attendees. Please note Convention guests tend to spend 2.3x more money on hotel, gambling, eating, etc. than recreational guests.

These numbers tell me expect MGM to post a blowout quarter on November 7.