Wednesday, March 17, 2010

MGM--Ready to "Roar!"

On January 12, Goldman Sachs upgraded MGM and moved their target up to 16. Since then, we had a lackluster earnings report, and an $800 million debt raise by MGM, that would alleviate any immediate financial pressure. That was one of the risks that is now gone.

Furthermore, MGM will have a Macau offering, which will further strengthen their balance sheet, and with yesterday's news out from Chui, current property holders value in Macau will now be worth dramatically more. At these prices MGM, can really break out, as the price woefully undervalues MGM's enterprise value. After all--who is building in Las Vegas?

I like the stock to 22 as it is breaking out on the daily and weekly chart.

MGM is ready to Roar!


Anonymous said...

So what calls do you own?

Anonymous said...

Hi Palmoni, I bought MGM today at $12.48 and got too many shares by a mistake. Now I either sell half of that at a loss or wait till its back up. What is your conviction here regarding MGM's near share price movement? Thanks.