Insiders have access to real-time information on their companies and often also have a wealth of experience that can help them evaluate their firms’ prospects. If they are buying company stock, it’s generally worth taking a closer look.
In this report, we are going to highlight some interesting insider buying at MGM Resorts International (MGM:US). MGM Resorts International is a global entertainment business that owns a vast portfolio of hotels and casinos across the US and Asia. It also has a joint venture, BetMGM, which offers US sports betting and online gaming. It is listed on the New York Stock Exchange and currently has a market capitalization of $14.04 billion.
Insider buying at MGM Resorts
Our insider transaction data shows that on August 25, board member Janet Swartz purchased 14,230 MGM shares at a price of $35.05 per share. This purchase cost the insider approximately $499,000 and increased her holding to 19,858 shares.
Ms. Swartz has a background in the travel industry. Currently, she is Group President of Holland America Group within Carnival Corporation, leading Princess Cruises, Holland America Line, Seabourn and Carnival Australia. Previously, she led Carnival’s Princess Cruises expansion throughout Asia. So, she is likely to have good insight into the state of the industry.
What stands out here, aside from the fact that the insider has spent around half a million dollars on stock, is that Ms. Swartz has increased the size of her position by around 250%. This suggests that she is very confident that MGM stock is set to move higher.
MGM’s latest results, posted in early August, showed that the company has momentum at present.
For the second quarter of 2022, consolidated net revenues amounted to $3.3 billion compared to $2.3 billion in the prior year quarter – an increase of 44%. Meanwhile, the company generated a record Las Vegas Strip adjusted property EBITDAR of $825 million, up 108% year on year. Adjusted diluted earnings per share came in at $0.03, versus a loss of $0.13 in the prior year quarter.
“Our second quarter results were outstanding, representing the best ever Adjusted Property EBITDAR quarter at the Company’s Las Vegas Strip Resorts and best second quarter Adjusted Property EBITDAR at our Regional Operations driven by consistent strong demand from the leisure consumer and a return from our convention customers,” commented CEO and President Bill Hornbuckle.
Looking ahead, management was confident in relation to the outlook. “We look to the future with optimism, as our convention and event calendar for the next year remain notably strong and BetMGM continues to be a market leader with a roadmap for growth,” said Mr. Hornbuckle.
It’s worth noting that during Q2, the company repurchased $1.1 billion of shares of common stock, or 8% of outstanding shares. Management noted in the Q2 results that it saw “exceptional value” in the stock.
In light of these developments, we see the insider buying here as a bullish indicator.