In this article, we discuss 5 stocks to sell now according to Michael Zimmerman’s Prentice Capital Management. If you want to read our detailed analysis of Zimmerman’s history and hedge fund performance, go directly to 10 Stocks to Sell Now According to Michael Zimmerman’s Prentice Capital Management.
5. MGM Resorts International (NYSE:MGM)
Number of Hedge Fund Holders: 55
Percentage Decrease in Stake in Q4: 100%
MGM Resorts International (NYSE:MGM) owns and manages several casino resorts in the United States and China that offer gaming, hotel rooms, food, entertainment, shopping, and other services. MGM Resorts International (NYSE:MGM) has been in Prentice Capital Management’s portfolio since the first quarter of 2020. The fund sold its stake completely in the fourth quarter of 2021.
According to Insider Monkey’s database of elite funds, 55 hedge funds were long MGM Resorts International (NYSE:MGM) in the fourth quarter of 2021, up from 50 funds in the preceding quarter. Corvex Capital is a significant stakeholder of MGM Resorts International (NYSE:MGM), with 15.67 million shares worth $703.44 million.
As part of a comprehensive research note reviewing Q1 earnings in Gaming, Truist analyst Barry Jonas dropped his price objective on MGM Resorts International (NYSE:MGM) to $48 from $51 and reiterated a Hold rating on the stock.
In its fourth quarter 2021 investor letter, Longleaf Partners Fund mentioned MGM Resorts International (NYSE:MGM). Here is what the fund said:
“MGM Resorts (43%, 2.54%; 4%, 0.29%), the casino and online gaming company, was another strong performer. The company’s third quarter Las Vegas revenues grew massively over 2020, approaching within 8% of 2019 levels despite some lingering COVID restrictions. MGM has gained nearly 10 percentage points of Vegas Strip market share since 2019, an extraordinary achievement for CEO Bill Hornbuckle, who has also done a terrific job controlling corporate costs. Though its current Las Vegas margins are unsustainably high at 39%, MGM’s Vegas EBITDA should grow steadily from this year’s $1.6 billion as national reopening boosts travel in the next year(s). MGM’s regional casinos are now exceeding their 2019 EBITDA levels as well, while MGM’s digital iGaming revenues grew 17% sequentially for an excellent 32% market share. MGM repurchased shares at a 13% annualized pace during the last quarter at a $40 average price, while our growing value is now approaching $60. MGM acquired the Cosmopolitan, a “tuck-in” casino with achievable synergies, at a reasonable price and recently announced the sale of the Mirage for a headline price over $1billion, well above our appraisal for the asset. We are delighted with the progress of this management team and business over the last two years.”
