Is MGM Resorts International (NYSE:MGM) undervalued? The smart money is taking a bullish view. The number of bullish hedge fund bets improved by 3 recently.
In the 21st century investor’s toolkit, there are plenty of gauges market participants can use to analyze publicly traded companies. A couple of the most under-the-radar are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the elite fund managers can trounce the S&P 500 by a very impressive amount (see just how much).
Just as key, positive insider trading sentiment is a second way to break down the world of equities. As the old adage goes: there are a variety of motivations for an upper level exec to get rid of shares of his or her company, but only one, very simple reason why they would buy. Plenty of empirical studies have demonstrated the valuable potential of this method if you understand what to do (learn more here).
With all of this in mind, it’s important to take a peek at the key action regarding MGM Resorts International (NYSE:MGM).
Hedge fund activity in MGM Resorts International (NYSE:MGM)
In preparation for this quarter, a total of 37 of the hedge funds we track held long positions in this stock, a change of 9% from one quarter earlier. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were upping their stakes significantly.
When looking at the hedgies we track, John Paulson’s Paulson & Co had the largest position in MGM Resorts International (NYSE:MGM), worth close to $491.6 million, accounting for 2.8% of its total 13F portfolio. On Paulson & Co’s heels is Appaloosa Management LP, managed by David Tepper, which held a $90.7 million position; 1.9% of its 13F portfolio is allocated to the company. Some other peers that are bullish include Sanford J. Colen’s Apex Capital, Brian J. Higgins’s King Street Capital and Sanford J. Colen’s Apex Capital.
Now, some big names have jumped into MGM Resorts International (NYSE:MGM) headfirst. PAR Capital Management, managed by Paul Reeder and Edward Shapiro, established the most outsized position in MGM Resorts International (NYSE:MGM). PAR Capital Management had 34.6 million invested in the company at the end of the quarter. Curtis Macnguyen’s Ivory Capital (Investment Mgmt) also initiated a $18.1 million position during the quarter. The other funds with brand new MGM positions are Malcolm Fairbairn’s Ascend Capital, James H. Litinsky’s JHL Capital Group, and Boaz Weinstein’s Saba Capital.
What have insiders been doing with MGM Resorts International (NYSE:MGM)?
Insider purchases made by high-level executives is best served when the primary stock in question has experienced transactions within the past 180 days. Over the last six-month time frame, MGM Resorts International (NYSE:MGM) has experienced zero unique insiders purchasing, and 3 insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to MGM Resorts International (NYSE:MGM). These stocks are Vail Resorts, Inc. (NYSE:MTN), Melco Crown Entertainment Ltd (ADR) (NASDAQ:MPEL), Wynn Resorts, Limited (NASDAQ:WYNN), Penn National Gaming, Inc (NASDAQ:PENN), and Royal Caribbean Cruises Ltd. (NYSE:RCL). This group of stocks belong to the resorts & casinos industry and their market caps are similar to MGM’s market cap.