While the market focuses on earnings, companies can do a lot to impact that number. It’s harder to impact revenues, or the raw cash coming in the door.
When business is good, more money is coming in. And that will translate to higher earnings and should also propel shares higher over time. When an industry leader is seeing higher revenues, it’s also a great sign for the sector as a whole
Hotel and casino operator
MGM Resorts (MGM) just saw a big revenue beat, as well as strong earnings.
Money is coming in hot for the company’s Macau operations, and Las Vegas revenues also look bullish.
While the earnings report pushed shares higher, they’re still down 7% over the past year, and off more than 20% from their peak.
That’s also caused shares to slide to less than 13 times earnings.
Action to take: Investors may like MGM shares here, as they’ll likely push higher in the weeks ahead following the latest earnings report. MGM does pay a dividend, but it’s stingy at only a penny.
For traders, shares look ready for a bounce higher.
The September $45 calls, last trading for about $2.00, could see mid-double-digit returns or better in the coming weeks. Traders may want to take quick profits following a strong day for shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.