Major Purchase Alert: PAUL SALEM Invests $4.99M In MGM Resorts Intl Stock

On August 6, a substantial insider purchase was made by PAUL SALEM, Director at MGM Resorts Intl MGM, as per the latest SEC filing.

What Happened: SALEM's recent move, as outlined in a Form 4 filing with the U.S. Securities and Exchange Commission on Tuesday, involves purchasing 147,500 shares of MGM Resorts Intl. The total transaction value is $4,986,090.

In the Wednesday's morning session, MGM Resorts Intl's shares are currently trading at $37.09, experiencing a up of 4.77%.

About MGM Resorts Intl

MGM Resorts is the largest resort operator on the Las Vegas Strip with 35,000 guest rooms and suites, representing about one fourth of all units in the market. The company's Vegas properties include MGM Grand, Mandalay Bay, Park MGM, Luxor, New York-New York, and Bellagio. The Strip contributed approximately 62% of total EBITDAR in 2023. MGM also owns US regional assets, which represented low-20s of 2023 EBITDAR (MGM's Macao EBITDAR was 17% of the total in 2023). MGM's US sports and iGaming operations are currently a high-single-digit percentage of its total revenue. The company also operates the 56%-owned MGM China casinos with a new property that opened on the Cotai Strip in early 2018. Further, we estimate MGM will open a resort in Japan in 2030.

Understanding the Numbers: MGM Resorts Intl's Finances

Revenue Growth: MGM Resorts Intl's remarkable performance in 3 months is evident. As of 30 June, 2024, the company achieved an impressive revenue growth rate of 9.77%. This signifies a substantial increase in the company's top-line earnings. When compared to others in the Consumer Discretionary sector, the company excelled with a growth rate higher than the average among peers.

Insights into Profitability:

• Gross Margin: With a low gross margin of 46.31%, the company exhibits below-average profitability, signaling potential struggles in cost efficiency compared to its industry peers.

• Earnings per Share (EPS): MGM Resorts Intl's EPS is below the industry average, signaling challenges in bottom-line performance with a current EPS of 0.6.

Debt Management: MGM Resorts Intl's debt-to-equity ratio stands notably higher than the industry average, reaching 9.77. This indicates a heavier reliance on borrowed funds, raising concerns about financial leverage.

Valuation Metrics:

• Price to Earnings (P/E) Ratio: The P/E ratio of 13.31 is lower than the industry average, implying a discounted valuation for MGM Resorts Intl's stock.

• Price to Sales (P/S) Ratio: The current P/S ratio of 0.69 is below industry norms, suggesting potential undervaluation and presenting an investment opportunity for those considering sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): Boasting an EV/EBITDA ratio of 16.59, MGM Resorts Intl demonstrates a robust market valuation, outperforming industry benchmarks.

Market Capitalization Analysis: The company's market capitalization surpasses industry averages, showcasing a dominant size relative to peers and suggesting a strong market position.

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Unmasking the Significance of Insider Transactions

Emphasizing the importance of a comprehensive approach, considering insider transactions is valuable, but it's crucial to evaluate them in conjunction with other investment factors.

From a legal standpoint, the term "insider" pertains to any officer, director, or beneficial owner holding more than ten percent of a company's equity securities as outlined in Section 12 of the Securities Exchange Act of 1934. This encompasses executives in the c-suite and significant hedge funds. These insiders are mandated to inform the public of their transactions through a Form 4 filing, to be submitted within two business days of the transaction.

A company insider's new purchase is a indicator of their positive anticipation for a rise in the stock.

While insider sells may not necessarily reflect a bearish view and can be motivated by various factors.

Important Transaction Codes

When it comes to transactions, investors tend to focus on those in the open market, detailed in Table I of the Form 4 filing. A P in Box 3 denotes a purchase, while S indicates a sale. Transaction code C signals the conversion of an option, and transaction code A denotes a grant, award, or other acquisition of securities from the company.

Check Out The Full List Of MGM Resorts Intl's Insider Trades.

This article was generated by Benzinga's automated content engine and reviewed by an editor.