Is It Time to Roll the Dice on MGM?

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Aug. 5 (Bloomberg) -- Credit Suisses's Joel Simkins, MWS Capital's Matt Shapiro and Bloomberg's Brian Miller preview MGM's earnings and discuss the outlook for the company with Trish Regan on Bloomberg Television's "Street Smart." (Source: Bloomberg)

Is it time to roll the dice on mgm?

Last quarter, the company posted its best results since the beginning of the downturn five years ago.

Look at three factors when it comes to mgm's growth.

New half the comeback of the cash cow macau and the potential of online gaming.

We're joined by our guests.

Let me go first over to brand.

What have you been watching for?

What are people expecting?

What excites you about this company?

When you look at their revenue streams, it is not 50% a loss biggest strip, 32% macau, and when you look at the las vegas strip, there's a lot of growth out there.

What has been to their benefit is the convention business.

They expect to see strong growth in the convention business and that carries over to 2014. macau, that is a huge market.

And they have been doing it pretty successfully thus far?

Yes, they have.

They're one of the smaller operators and their heavily skewed toward the vip segment.

What about on line?

They have about a 50-50 joint venture with the gaming board of of the antics city.

Bam online gaming there.

New jersey is pushing that forward, so that should be an incremental revenue stream starting next year.

Are you seeing a lot of our personal and tea?

As a result of the things that -- a lot of opportunity?

As a result of the things that brian just outlined.

There is significant growth in macau and they just added the $2.5 billion casino project that is up opening on schedule in early 2016. there are a number of development opportunities year in the u.s. in washington, d.c. and also in springfield, massachusetts.

That will allow for growth beyond loss vegas.

It really is a wonderful turnaround story.

I spoke with the ceo and he will be on the show tomorrow.

He was saying that years ago when we were first dealing with city center, our stock was at $1.81. you can see that in 2008. quite a turnaround.

Macao is part of that.

Online gaming is promising.

But you're also in an environment where there is a little bit of these casinos feeding on each other.

What does that do to the overall business when you can effectively gamble wherever you want?

You don't have to go to vegas.

There is no doubt it is a pretty significant catalyst asian in the regional markets.

-- catalization in the regional markets.

Not get a lot of capacity on the las vegas strip.

We think we are about five, 10, 15 years away from hitting a saturation in the macau market.

And gm will not be dealing with this mobilization issue as much.

-- mgm will not be dealing with this mobilization issue as much.

What do you -- what are you seeing in the options market?

I don't think the put is very effective.

And gm has missed earnings twice last year.

-- mgm has missed earnings twice the last year.

They've got to make two $0.4 billion in revenue this quarter.

-- $2.4 billion in revenue this quarter.

And the online gaming is going to be competitive.

It is going to be gamblers at the tables in the casinos.

You can talk about china all you want over the next 10 years.

We are talking about tonight.

This september 15th put for 30¢. any pullback in the stock market could be a payoff for about a month and a half.

Do you agree with those numbers?

I don't think so.

They're looking at 4% revenue growth and 6% profit.

They should be able to meet those.

Thanks to all of you.

The chairman and ceo coming on to the show tomorrow.


This text has been automatically generated. It may not be 100% accurate.


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