CNBC show boosts MGM Resorts stock
Shares of MGM Resorts International bucked the overall stock market's downward slide Monday, thanks to a recommendation from cable television analyst Jim Cramer.
Shares of the casino operator closed at $12.92 on the New York Stock Exchange Monday, up 81 cents or 6.69 percent after Cramer touted the Strip casino giant on his CNBC show "Mad Money" on Friday.
"Virtually everything about MGM that used to be a negative is now a positive," Cramer said.
Almost 85 million shares of MGM Resorts were traded Monday, more than three times the average daily volume.
He added that MGM Resorts' CityCenter development, a 50-50 joint venture with Dubai World that opened last December, "was the poster child for everything that was wrong with Vegas at the worst time."
MGM Resorts has 10 casinos on the Strip, including Aria at CityCenter.
Cramer said two metrics Wall Street looks at in judging a casino company's results -- average daily hotel room rates and room occupancy -- are both up.
Wall Street is still stunned by the 21 percent increase in overall Strip gaming revenues reported in August by Nevada gaming regulators.
Cramer said MGM Resorts was the best way for investors to bet on a Las Vegas recovery.
MGM Resorts recently undertook several steps to restructure more than $1 billion of its $13 billion in long-term debt, pushing maturities out past 2013.
"MGM turned around its balance sheet, which was horrific during the recession," Cramer said. "At $12, MGM is worth a speculation, if not a gamble."
Cramer said the company's backing of Senate Majority Leader Harry Reid's re-election last week, both financially and through television advertising endorsements by company Chairman and CEO Jim Murren, may pay off in dividends in the long run.
"With a comeback, (CityCenter) could bring huge profits," Cramer said.
Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871.
