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Bet On MGM?

Tuesday, 12 Jan 2010 | 5:30 PM ET

Investors are watching casino stocks after Goldman Sachs upgraded MGM to "buy" from "neutral," saying it expects Las Vegas trends will start to get "less bad" over the next several quarters.

The brokerage, which raised its price target on the stock by $6 to $16, also sees strong upside to earnings as profits are now at trough levels.

MGM shares are undervalued on current and mid-level earnings, especially relative to those of its peers, and corporate finance activities could create relief as the balance sheet overhang is reduced, Goldman said in a note dated Jan. 11.

What’s do the Fast Money trader think?

Options action suggests the stock could go even higher, explains Pete Najarian. In fact, the action suggests to me it could explode by 2011.


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Trader disclosure: On Jan 12th, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Seymour Owns (AAPL), (AA), (AKS), (BAC), (FXI), (GE), (INFY), (LVS), (MGM), (SBUX), (MOO), (INTC), (VALE); Seymour Is Short (TSO); Finerman's Firm Is Short (IJR), (MDY), (SPY), t (IWM); Finerman's Firm Is Short (USO); Finerman's Firm Is Short (UNG); Finerman Owns (AAPL); Finerman's Firm Owns (BAC) Preferred, (BAC), (BAC) Call Spreads; Finerman's Firm Owns (WFC) Preferred; Finerman Owns (BAC) Preferred, (BAC); Finerman Owns (JPM) Calls; Finerman's Firm Owns (MCD), (MSFT), (MSFT), (PBR), (STJ), (TGT), (TJX), (WMT), (YUM), (STJ), (BDX), (BCR), (BSX), (GOOG); Najarian Owns (AMAT) Calls; Najarian Owns (AA) Feb. Calls, Is Short (AA) Jan. Calls; Najarian Owns (CLF), Is Short (CLF) Calls; Najarian Owns (FCX), Is Short (FCX) Calls; Najarian Owns (MGM) Call Spread; Najarian Owns (MS); Najarian Owns (STJ) Calls; Terranova Is Long March British Pound Futures; Terranova Is Long Copper Backwardation: Long May 2009, Short July 2009; Terranova Is Short (AGU), (JCI), (CMA), (ICE), (ESS),(CAL); Terranova Owns (BAC), (QCOM), (MSFT), (EMC), (FTO), (XOM); Terranova Owns (XHB) March Puts; Adami Owns (GS), (INTC), (AGU), (BTU), (C), (MSFT), (NUE); Kaminsky Is Short (QQQQ)

GE Is The Parent Company Of CNBC

For Joe Terranova
Terranova Works For (VRTS)
Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.
Virtus Investment Partners Owns More Than 1% Of (CLB)
Virtus Investment Partners Owns More Than 1% Of (DLR)
Virtus Investment Partners Owns More Than 1% Of (EXR)
Virtus Investment Partners Owns More Than 1% Of (IGE)
Virtus Investment Partners Owns More Than 1% Of (XLY)
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (UA)
Virtus Investment Partners Owns More Than 1% Of (XLB)
Virtus Investment Partners Owns More Than 1% Of (XLI)
Virtus Investment Partners Owns More Than 1% Of (SKT)

For Tim Seymour
Seygem Asset Management Is Short (EEM)
Seygem Asset Management Is Short (EWA)

For Geoff Meacham
J.P. Morgan Has An Investment Banking Relationship With (CELG), (AMGN), (OSIP) (ACOR), (MDVN)


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