Billionaire Prem Watsa’s 10 Stock Picks With Highest Potential

3. MGM Resorts International (NYSE:MGM)

Number of Hedge Fund Holders: 47

Fairfax Financial Holdings’ Stake: $1.02 Million

Analysts’ Upside Potential as of April 21: 65.70%

MGM Resorts International (NYSE:MGM) is a multinational hospitality, sports and entertainment company. It operates casino resorts that offer gaming, hotel, convention, dining, entertainment, retail, and other resort amenities. On April 17, Citizens JMP analyst Jordan Bender reduced the price target for MGM Resorts International (NYSE:MGM) from $50 to $45 while maintaining an Outperform rating. The analyst noted that brick-and-mortar casino fundamentals remain stable but cited uncertainty as the reason for lowering estimates and price targets across the sector.

The hotel and casino operator reported adjusted earnings per share of $0.45 against $0.08 expected. While revenue was down 1% year-over-year to $4.35 billion, it still topped analyst forecasts. MGM China revenue was up 4% year-over-year to $1 billion, driven by significant casino revenues. On the other hand, Las Vegas strip resort revenues were down 6% to $2.2 billion.

MGM operations in China have received a significant boost, fuelled by strong mass market growth, as the bounce back from the Covid-19-triggered slow growth gathered steam. During the Chinese New Year holiday, the company recorded an 18% rise in foot traffic, suggesting that this significant market may be recovering. For MGM Resorts International (NYSE:MGM), the digital market, which includes BetMGM, offers substantial development potential and is expected to be profitable this year.