MGM Resorts: A High-Risk High-Reward Opportunity

Kelly James Frank
50 Followers

Summary

  • MGM Resorts shares have fallen almost 30% from their 2023 share price high of $51.35 on July 31st.
  • The current share price is greatly affected by the September 14, 2023, Scattered Spider hacking group announcement that it had infiltrated MGM’s systems, creating significant operational and gaming system outages.
  • Regardless, my five-step analysis of macro, sector, valuation, technical, and brand discovery posits that MGM is positioned for growth from increased post-Covid tourism, sports betting, and online gaming.
  • I recommend the MGM shares as a risk-on buy.

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Investment Thesis

The MGM Resorts International (NYSE:MGM) share price is 30% below its 52-week $51.35 high, primarily due to a witches brew of excessive corporate debt, an incurred cyber-hack, and a possible employee strike. However, these downside events are offset by the company's acceleration into sports-betting

This article was written by

50 Followers
KELLY JAMES FRANK is the founder of 13.8 Capital, an asset management firm focused on growth investments. He is the author of To the Moon Investing: Visually Mapping Your Winning Stock Market Portfolio.  Kelly is a graduate of the University of Alberta (B.Comm.) and he retired from his VP position with a NYSE listed company to further pursue his passion of stock investing.  Kelly developed a proprietary stock-choice model that reviews assets through a five-step model of macro, sector, valuation, technical, and brand factors.

Analyst’s Disclosure:I/we have a beneficial long position in the shares of MGM either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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