Investors are closely watching MGM amid concerns that a possible debt default at Dubai World could derail the casino trade.
"Dubai is a large holder in MGM shares," explains Susquehanna Financial Group analyst Robert LaFleur. "If they're in a position where they're seeking liquidity, you have to wonder whether they'll look to those shares as a source of potential liquidity."
Meanwhile, shares of Las Vegas Sands and other casino operators also closed lower on Monday with Dubai triggering wider fears that a default could derail the budding economic recovery -- and as a result general investment in the space.
What must you know to trade the space?
Although Dubai is important, it's equally important to remember that the Las Vegas strip has gone through tremendous pressure in terms of what consumers are spending and what hotels can charge for rooms, explains JPMorgan casino analyst Joseph Greff.
But we are hearing meeting planners are starting to book conventions in Las Vegas to take advantage of competitive rates.
What’s the trade?
My top picks in gaming are MGM, LVS (for reasons mentioned above) as well as slot machine maker IGT, says Greff. I think the pullback is interesting in what I think will be a pickup in slot replacements.
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Trader disclosure: On November 30th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE), (BTU); Finerman's Firm Owns (PLCE), (MSFT), (WMT), (PDE), (RIG), (TGT); Finerman's Firm Owns (BAC) Preferred, (BAC), (BAC) Calls; Finerman Owns (BAC) Preferred, (BAC); Finerman's Firm Is Short (IJR), (IWM), (MDY), (SPY), (USO), (UNG); Najarian Owns (AAPL) Call Spread; Najarian Owns (BRCD) & (BRCD) Calls; Najarian Owns (INTC) & Short (INTC) Calls; Najarian Owns (DELL) Calls; Najarian Owns (DE) Call Spread; Najarian Owns (FCX) Call Spread; Najarian Owns (INTC) & (INTC) Calls; Najarian Owns (UAUA) Call Spread; Terranova Owns (SU), (GOOG), (AAPL)
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