Trader reveals what he did with MGM stock amidst regulatory crackdown in Macau
- Wells Fargo initiates MGM Resorts with an 'overweight' rating and a PT of $55.
- Jason Snipe explains why he bought more shares of MGM on CNBC's "Halftime Report".
- Shares of the hospitality & entertainment company fell another 4.0% on Wednesday.
Shares of MGM Resorts International (NYSE: MGM) lost another 5.0% on Wednesday as Macau opened a 45-day review of its casino industry with expectations of stiffer regulations ahead.
Wells Fargo sees an over 35% upside in MGM
Amidst the sell-off, however, Wells Fargo’s Daniel Politzer sees an opportunity to “buy the dip”.
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Politzer initiated MGM Resorts with an ‘overweight’ rating on Wednesday and a price target of $55 that translates to an over 35% upside from here.
Politzer also initiated several other gaming stocks this morning with an ‘overweight’ rating, including notable names like Caesars, Boyd, Red Rock, Churchill Downs, and DraftKings.
Jason Snipe explains why he bought more shares of MGM
Odyssey Capital Advisors Jason Snipe agrees to the bullish call on MGM Resorts and bought more shares of the U.S. hospitality and entertainment company this morning. Defending his stance on CNBC’s “Halftime Report”, Snipe said:
The headline from Macau is not great from a regulatory perspective, but I like MGM on the cyclical side. They have the cleanest balance sheet in the group, and only 13% of their business is China-based.
Snipe also sees a significant “uptrend” in BetMGM – the company’s online sports betting unit that CFO Jonathan Halkyard said last week could go global in the future.
Stephen Weiss disagrees with the bullish call
During the same interview with CNBC, Short Hills Capitals Partners’ Stephen Weiss, however, warned against MGM Resorts.
While only 13% of MGM’s revenue comes from China, it can go away over time. China keeps smacking U.S. investors over their head and what they’re saying is, hey, I like it; hit me again, hit me harder, Weiss said.