12 Most Undervalued Travel Stocks to Buy According to Hedge Funds

8) MGM Resorts International (NYSE:MGM)

Forward P/E Ratio as of 13 September: 12.14x

Number of Hedge Funds: 44

MGM Resorts International (NYSE:MGM) operates gaming, hospitality, and entertainment resorts. The company provides accommodation, dining, meetings, and other travel-related services.

Wall Street analysts opine that MGM Resorts International (NYSE:MGM) appears to be well-placed to achieve strong growth given its scale, healthy competitive position, and diversification in Las Vegas and regional markets. The continued rebound in Macau for both of the company’s properties is expected to fuel growth over the near term.

MGM Resorts International (NYSE:MGM)’s stronghold on the Las Vegas Strip exhibits strong brand equity and market dominance. With around one-fourth of all units in the market, the company’s properties like MGM Grand, Mandalay Bay, and Bellagio are expected to serve as luxury landmarks. This dominant position can result in getting a high volume of visitors and maintaining a significant market share. Given its brand’s reputation, the company can charge premium pricing, which should help its revenue growth moving forward.

MGM Resorts International (NYSE:MGM) continues to focus on inorganic growth opportunities as its strategic investments in digital capabilities continue to make up a competitive advantage. The recent acquisition of LeoVegas and 50% ownership in BetMGM, LLC exhibit its focus on expanding its online gaming footprint. These digital ventures should also further diversify its revenue sources.

Analysts at Susquehanna upped their price target on shares of MGM Resorts International (NYSE:MGM) from $54.00 to $55.00. They gave a “Positive” rating on 1^st August. Insider Monkey’s 2Q 2024 data revealed that 44 hedge funds are holding MGM Resorts International (NYSE:MGM).

Longleaf Partners released its fourth quarter 2023 investor letter and mentioned about MGM Resorts International (NYSE:MGM). Here is what the fund said:

“MGM Resorts International (NYSE:MGM) & Hyatt – Hospitality companies MGM Resorts and Hyatt were both strong performers in the fourth quarter and for the year, outperforming expectations that the post-COVID travel rebound would ease in 2023. Casino and online gaming company MGM saw double-digit revenue growth and strong 2023 bookings in Las Vegas in the first half, which moderated in the second half but remained solid. A cybersecurity attack negatively impacted 3Q results, but MGM does not expect the $100 million hit to have a material effect on its financial condition and operational results for the year. MGM bought back discounted shares at a 15% annualized rate and authorized another $2 billion buyback in 4Q, which represents another 15% of the company.”