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Barclays’ Top Retail Picks: Are They Good Stocks To Buy? Hanesbrands Inc. (HBI), MGM Resorts International (MGM) and More

Barclays has declared MGM Resorts International (NYSE:MGM) as its top gaming stock for 2015. The analyst picked MGM Resorts because of the geographical diversity offered by the company, which could help the firm benefit from the improving trends in Las Vegas and gain near term value as soon as the Macau market headwinds disappear. A report from the Chinese authorities announcing ease in restrictions for local tourists to visit Macau has boosted the shares of MGM Resorts International (NYSE:MGM) by 3% recently . According to the new restrictions, travelers with a passport from mainland China will now be able to stay in Macau for seven days against previous limit of five days. Further, the travelers can visit the city twice a month instead of the previous restriction of two visits per 60 days. This announcement could give the necessary boost to the gaming operators in Macau helping them recoup for the slow growth throughout the year.

Another factor that could help boost the shareholder value in MGM Resorts International (NYSE:MGM) is the interest shown by the activist investor Keith Meister. Corvex Capital reported new position in the gaming operator at the end of the first quarter of 2015 with 3.90 million shares valued at $81.99 million. Hedge fund sentiment is bullish for the shares of MGM Resorts as the company has received total investments of $1.76 billion from 58 hedge fund managers against previous quarter investments of $1.45 billion made by 45 hedge fund investors. James Dinan’s York Capital Management is among the primary shareholders of the company with reported ownership of 9.94 million shares valued at $209.09 million towards the end of the first quarter.

Panera Bread Co (NASDAQ:PNRA) is another name in the list of retail stock picks of Barclays primarily because of its Panera 2.0 turnaround initiative. At the core of Panera 2.0 is a consumer-facing model that is working towards operational enhancement and digital upgrades. Panera Bread Co (NASDAQ:PNRA) is trying to cut down its labor costs with digital ordering and the new changes in delivery system could help elevate sales. In theory, it would help customers skip ordering line and they can even make an online order for pickup. The CEO of Panera Bread Co, Ron Shaich, said, “Panera has far greater potential to both increase sales and reduce labor for many years to come.” Barclays is expecting that the shares of Panera Bread will outperform the market along with growth in EPS in the next 12 months. Smart Money has also shown a positive sentiment towards these changes, as 25 hedge fund managers invested $369.93 million at the end of the first quarter against previous quarter investments of $347.32 million from 21 hedge fund investors. Rob Citrone’s Discovery Capital Management held a major position in Panera Bread Co (NASDAQ:PNRA) with 431,458 shares valued at $69.03 million.

Disclosure: None

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