Longleaf Partners Fund, a Memphis-based fund under Southeastern Asset Management, published its “Longleaf Partners Fund” fourth quarter 2021 investor letter – a copy of which can be downloaded here. Longleaf Partners Fund added 6.18% in the fourth quarter, taking returns for the full year to 23.58%, well ahead of its absolute return goal. However, the S&P 500 rallied 11.03% in the fourth quarter, taking the index’s full-year returns to 28.71%. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.
Longleaf Partners Fund, in its Q4 2021 investor letter, mentioned MGM Resorts International (NYSE: MGM) and discussed its stance on the firm. MGM Resorts International is a Las Vegas, Nevada-based hospitality company with a $20.2 billion market capitalization. MGM delivered a 0.53% return since the beginning of the year, while its 12-month returns are up by 19.40%. The stock closed at $45.12 per share on February 25, 2022.
Here is what Longleaf Partners Fund has to say about MGM Resorts International in its Q4 2021 investor letter:
“MGM Resorts (43%, 2.54%; 4%, 0.29%), the casino and online gaming company, was another strong performer. The company’s third quarter Las Vegas revenues grew massively over 2020, approaching within 8% of 2019 levels despite some lingering COVID restrictions. MGM has gained nearly 10 percentage points of Vegas Strip market share since 2019, an extraordinary achievement for CEO Bill Hornbuckle, who has also done a terrific job controlling corporate costs. Though its current Las Vegas margins are unsustainably high at 39%, MGM’s Vegas EBITDA should grow steadily from this year’s $1.6 billion as national reopening boosts travel in the next year(s). MGM’s regional casinos are now exceeding their 2019 EBITDA levels as well, while MGM’s digital iGaming revenues grew 17% sequentially for an excellent 32% market share. MGM repurchased shares at a 13% annualized pace during the last quarter at a $40 average price, while our growing value is now approaching $60. MGM acquired the Cosmopolitan, a “tuck-in” casino with achievable synergies, at a reasonable price and recently announced the sale of the Mirage for a headline price over $1billion, well above our appraisal for the asset. We are delighted with the progress of this management team and business over the last two years.”
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Our calculations show that MGM Resorts International (NYSE: MGM) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. MGM was in 55 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 50 funds in the previous quarter. MGM Resorts International (NYSE: MGM) delivered a 7.81% return in the past 3 months.
In November 2021, we also shared another hedge fund’s views on MGM in another article. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.
Disclosure: None. This article is originally published at Insider Monkey.
