We see the thinking, but believe it is way low not fully anticipating and meaningful recovery in Macau and U.S. They have not only talked a good game, but since the arrival of the new management, have walked the walk.Ī snapshot of 2Q22: Moving on multiple fronts MGM data by YChartsĪbove: Hammered by the pandemic as are all verticals in the sector, but with prospects that are international and a currently cheap valuation that does not bake in such prospects.ĭiscount off high: ~30% (Nov.’21 before mass outbreak of Omicron variant spooked the sector). MGM has been transparent in its aims and strategies going back even before the management change that brought Bill Hornbuckle into the CEO chair. And at its current dead pooled stock price, it deserves a much higher valuation just for that.
But staring you in the face was the clear intention here that the company was well advanced on the runway of becoming the globe’s largest and most profitable gaming business by far within the decade. The takeaway to me was not just a thumping good second quarter for MGM and kudos to management for it. It’s a puzzle that began to form in 2015.
I talked with colleagues about my sense that the big story of MGM lies buried in plain sight if you fit the pieces to the puzzle together from the comments and responses of management. I read through tons of comments from sector analysts and industry observers. It is why I see a long haul buy hiding behind the normal run of corporate speak and analyst Q and A. That was my primary takeaway from listening to the earnings call of MGM Resorts International ( NYSE: MGM) and sifting through the data of its 2Q22 performance. More often than not these days, blizzards of data and the commentary drawn from it bury investors, contributing as much confusion as enlightenment. His comment sums up the message as he solves the case: They bring in legendary detective Auguste Dupin to pitch in for the desperate search. “The Purloined Letter” is a short story about a stolen letter from a royal woman who urgently enlists the police to retrieve it. “Perhaps the mystery is a little too plain, said Dupin…”įor those who have not read Poe’s famous 1845 detective story from which the above quote is drawn, a quick heads up. Jean-Luc Ichard/iStock Editorial via Getty Images
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