Today we shorted MGM Resorts (MGM) into the close at $10.73 a share at 3:48 PM EDT in our Real Time Alerts.
The short follows Gaming, Leisure and Lodging Sector Head Todd Jordan’s guidance from a bearish note he put out on October 15 suggesting that MGM could be a decent short. The stock is right at the TRADE line of resistance of $10.71 a share and fundamentals are in line with the call. MGM is a stock that has a great deal of exposure to the Las Vegas gaming market and right now, Vegas is in a slump. Per Jordan’s note:
“The Las Vegas Strip is back in a slump. Slot volume, which we believe is the most important barometer of the Strip, has declined for five consecutive months and the bleeding will likely continue through Q1 2013. Slot revenue has outpaced slot volume growth for years as the player payout has declined. We don’t think a strategy of “price increases” through worse player odds is sustainable.”