Consumer Health Concerns and General Market Weakness Pulled Down MGM Resorts International (MGM) in Q1

Meridian Funds, managed by ArrowMark Partners, released its “Meridian Hedged Equity Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. The uncertainty surrounding prospective tariff policies weighed on investor sentiment and risk assets in the first quarter of 2025. The fund returned -0.15% (net) in the quarter compared to the S&P 500 Index’s -4.27% return and its secondary benchmark, the CBOE S&P 500 Buy/Write Index’s -3.09% return. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.

In its first-quarter 2025 investor letter, Meridian Hedged Equity Fund highlighted stocks such as MGM Resorts International (NYSE:MGM). MGM Resorts International (NYSE:MGM) owns and operates casino, hotel, and entertainment resorts. The one-month return of MGM Resorts International (NYSE:MGM) was -4.46%, and its shares lost 17.49% of their value over the last 52 weeks. On June 10, 2025, MGM Resorts International (NYSE:MGM) stock closed at $33.39 per share, with a market capitalization of $9.087 billion.

Meridian Hedged Equity Fund stated the following regarding MGM Resorts International (NYSE:MGM) in its Q1 2025 investor letter:

“MGM Resorts International (NYSE:MGM) is a global hospitality and entertainment company primarily operating integrated casino resorts and digital gaming platforms. Its core business spans Las Vegas, U.S. regional markets, and Macau, and it is complemented by its BetMGM joint venture for online gaming and sports betting. We own MGM due to its diversified asset portfolio, strong balance sheet, and active share repurchase program.

We see a pathway to profitability for its BetMGM digital venture as a driver of free cash flow growth. In the most recent quarter, MGM performed in line with expectations, primarily due to strong results in the U.S. and Macau. Las Vegas faced challenging year-over-year comparisons, however, underlying demand remained solid. Management reported a positive start to 2025 and expects segment growth for the year. While fundamentals appear to be on solid footing, the stock fell during the period on consumer health concerns and general market weakness. We continue to hold our position and look for opportunities to incrementally add.”

MGM Resorts International (MGM): Among Billionaire Mason Hawkins’ Small-Cap Stocks with Huge Upside Potential

Aerial shot of an entertainment resort, its buildings and gaming amenities sprawling along the seafront.

MGM Resorts International (NYSE:MGM) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 52 hedge fund portfolios held MGM Resorts International (NYSE:MGM) at the end of the first quarter, which was 47 in the previous quarter. While we acknowledge the potential of MGM Resorts International (NYSE:MGM) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.

In another article, we covered MGM Resorts International (NYSE:MGM) and shared billionaire Mason Hawkins’ small-cap stocks with huge upside potential. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.