Trade-Ideas: MGM Resorts International (MGM) Is Today's Strong On High Relative Volume Stock

Trade-Ideas LLC identified MGM Resorts International (MGM) as a strong on high relative volume candidate
By TheStreet Wire ,

Trade-Ideas LLC identified

MGM Resorts International

(

MGM

) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified MGM Resorts International as such a stock due to the following factors:

  • MGM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $119.9 million.
  • MGM has traded 911,256 shares today.
  • MGM is trading at 3.49 times the normal volume for the stock at this time of day.
  • MGM is trading at a new high 3.00% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on MGM:

MGM Resorts International, through its wholly owned subsidiaries, owns and/or operates casino resorts in the United States and China. The company operates through two segments, Wholly Owned Domestic Resorts and MGM China. Currently there are 13 analysts that rate MGM Resorts International a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for MGM Resorts International has been 6.3 million shares per day over the past 30 days. MGM Resorts International has a market cap of $13.1 billion and is part of the services sector and leisure industry. The stock has a beta of 1.56 and a short float of 5% with 2.85 days to cover. Shares are up 2.6% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates MGM Resorts International as a

hold

. The company's strengths can be seen in multiple areas, such as its solid stock price performance, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and generally higher debt management risk.

Highlights from the ratings report include:

  • Compared to its closing price of one year ago, MGM's share price has jumped by 25.37%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • Net operating cash flow has increased to $224.60 million or 27.86% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 5.09%.
  • 41.09% is the gross profit margin for MGM RESORTS INTERNATIONAL which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, MGM's net profit margin of 3.02% significantly trails the industry average.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market, MGM RESORTS INTERNATIONAL's return on equity significantly trails that of both the industry average and the S&P 500.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Hotels, Restaurants & Leisure industry. The net income has significantly decreased by 60.7% when compared to the same quarter one year ago, falling from $169.85 million to $66.80 million.

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