We at Insider Monkey have gone over 867 13F filings that hedge funds and prominent investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. In this article, we look at what those funds think of MGM Resorts International (NYSE:MGM) based on that data.
MGM Resorts International (NYSE:MGM) has experienced a decrease in hedge fund interest in recent months. MGM Resorts International (NYSE:MGM) was in 50 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 67. Our calculations also showed that MGM isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Now let’s take a look at the latest hedge fund action regarding MGM Resorts International (NYSE:MGM).
Mason Hawkins of Southeastern Asset Management
Do Hedge Funds Think MGM Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 50 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -15% from one quarter earlier. On the other hand, there were a total of 41 hedge funds with a bullish position in MGM a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Corvex Capital, managed by Keith Meister, holds the largest position in MGM Resorts International (NYSE:MGM). Corvex Capital has a $676.3 million position in the stock, comprising 20.9% of its 13F portfolio. Sitting at the No. 2 spot is Karthik Sarma of SRS Investment Management, with a $490.9 million position; the fund has 6.9% of its 13F portfolio invested in the stock. Some other members of the smart money that hold long positions encompass William B. Gray’s Orbis Investment Management, Mason Hawkins’s Southeastern Asset Management and Richard Mashaal’s Rima Senvest Management. In terms of the portfolio weights assigned to each position Corvex Capital allocated the biggest weight to MGM Resorts International (NYSE:MGM), around 20.93% of its 13F portfolio. SRS Investment Management is also relatively very bullish on the stock, designating 6.9 percent of its 13F equity portfolio to MGM.
Since MGM Resorts International (NYSE:MGM) has witnessed a decline in interest from the entirety of the hedge funds we track, it’s easy to see that there lies a certain “tier” of fund managers that decided to sell off their full holdings by the end of the third quarter. Intriguingly, Robert Pitts’s Steadfast Capital Management sold off the biggest position of the “upper crust” of funds followed by Insider Monkey, worth an estimated $100.6 million in stock, and Josh Donfeld and David Rogers’s Castle Hook Partners was right behind this move, as the fund sold off about $27.7 million worth. These moves are interesting, as total hedge fund interest fell by 9 funds by the end of the third quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as MGM Resorts International (NYSE:MGM) but similarly valued. These stocks are Trimble Inc. (NASDAQ:TRMB), KeyCorp (NYSE:KEY), Fresenius Medical Care AG & Co. KGaA (NYSE:FMS), Baker Hughes Company Class A Common Stock (NASDAQ:BKR), W.W. Grainger, Inc. (NYSE:GWW), Live Nation Entertainment, Inc. (NYSE:LYV), and Ingersoll Rand Inc. (NYSE:IR). This group of stocks’ market caps are closest to MGM’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TRMB | 34 | 1814792 | 7 |
| KEY | 36 | 399496 | -4 |
| FMS | 4 | 231694 | -1 |
| BKR | 37 | 1013933 | -3 |
| GWW | 28 | 306060 | -1 |
| LYV | 47 | 1308167 | 7 |
| IR | 33 | 732834 | 2 |
| Average | 31.3 | 829568 | 1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 31.3 hedge funds with bullish positions and the average amount invested in these stocks was $830 million. That figure was $2741 million in MGM’s case. Live Nation Entertainment, Inc. (NYSE:LYV) is the most popular stock in this table. On the other hand Fresenius Medical Care AG & Co. KGaA (NYSE:FMS) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks MGM Resorts International (NYSE:MGM) is more popular among hedge funds. Our overall hedge fund sentiment score for MGM is 68.4. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. Unfortunately MGM wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on MGM were disappointed as the stock returned -8.3% since the end of the third quarter (through 11/30) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.
Follow Mgm Resorts International (NYSE:MGM)
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Disclosure: None. This article was originally published at Insider Monkey.
