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 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 $228.0 million.
- MGM has traded 1.5 million shares today.
- MGM is trading at 3.21 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. The company operates in two segments, Wholly Owned Domestic Resorts and MGM China. MGM has a PE ratio of 81.8. Currently there are 11 analysts that rate MGM Resorts International a buy, no analysts rate it a sell, and 3 rate it a hold.
The average volume for MGM Resorts International has been 9.2 million shares per day over the past 30 days. MGM Resorts International has a market cap of $11.2 billion and is part of the services sector and leisure industry. The stock has a beta of 1.84 and a short float of 7% with 2.91 days to cover. Shares are down 2.3% year-to-date as of the close of trading on Thursday.
rates MGM Resorts International as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and weak operating cash flow.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 10.2%. Since the same quarter one year prior, revenues slightly increased by 4.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
- MGM RESORTS INTERNATIONAL reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, MGM RESORTS INTERNATIONAL continued to lose money by earning -$0.33 versus -$3.61 in the prior year. This year, the market expects an improvement in earnings ($0.57 versus -$0.33).
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. We feel that the combination of its price rise over the last year and its current price-to-earnings ratio relative to its industry tend to reduce its upside potential.
- Net operating cash flow has declined marginally to $512.83 million or 4.21% when compared to the same quarter last year. Despite a decrease in cash flow of 4.21%, MGM RESORTS INTERNATIONAL is still significantly exceeding the industry average of -67.46%.
- Although MGM's debt-to-equity ratio of 2.90 is very high, it is currently less than that of the industry average. Along with the unfavorable debt-to-equity ratio, MGM maintains a poor quick ratio of 0.75, which illustrates the inability to avoid short-term cash problems.
- You can view the full MGM Resorts International Ratings Report.