Trade-Ideas: MGM Resorts International (MGM) Is Today's Unusual Social Activity Stock
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.
Trade-Ideas LLC identified
(
) as an unusual social activity candidate. In addition to specific proprietary factors, Trade-Ideas identified MGM Resorts International as such a stock due to the following factors:
- MGM has more that 20x the normal benchmarked social activity for this time of the day compared to its average of 36.26 mentions/day.
- MGM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $228.3 million.
Identifying stocks with 'Unusual Social Activity' tends to be a valuable process for traders looking to capitalize on the 'talk of the town' stocks that are basking in far more attention from the StockTwits financial community than normal. Good press? Bad press? It ultimately doesn't matter if it's good or bad if you know how to trade around the sentiment. Certain hedge funds use such data for their proprietary algorithms and it is not uncommon to see shared social sentiment play itself out in a stock's price trend.
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More details on MGM:
MGM Resorts International, through its wholly owned subsidiaries, owns and/or operates casino resorts. The company operates in two segments, Wholly Owned Domestic Resorts and MGM China. Currently there are 11 analysts that rate MGM Resorts International a buy, no analysts rate it a sell, and 2 rate it a hold.
The average volume for MGM Resorts International has been 12.5 million shares per day over the past 30 days. MGM Resorts International has a market cap of $10.8 billion and is part of the services sector and leisure industry. The stock has a beta of 1.51 and a short float of 8.3% with 3.18 days to cover. Shares are up 3.3% year-to-date as of the close of trading on Wednesday.
Analysis:
rates MGM Resorts International as a
. The company's strengths can be seen in multiple areas, such as its expanding profit margins and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, generally higher debt management risk and a generally disappointing performance in the stock itself.
Highlights from the ratings report include:
- 36.85% 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. Regardless of the strong results of the gross profit margin, the net profit margin of -14.34% is in-line with the industry average.
- MGM RESORTS INTERNATIONAL has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, MGM RESORTS INTERNATIONAL continued to lose money by earning -$0.32 versus -$0.35 in the prior year. This year, the market expects an improvement in earnings ($0.48 versus -$0.32).
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 7.7%. Since the same quarter one year prior, revenues slightly dropped by 5.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The debt-to-equity ratio is very high at 3.46 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, MGM maintains a poor quick ratio of 0.81, which illustrates the inability to avoid short-term cash problems.
- 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 502.5% when compared to the same quarter one year ago, falling from -$56.81 million to -$342.26 million.
- You can view the full MGM Resorts International Ratings Report.
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