Options Trade of the Week
MGM Resorts International (NYSE:MGM) Puts
Tuesday, February 17, 2015
**Macau Restrictions Along With Other Factors Impacting MGM!**
MGM Resorts International (NYSE: MGM), a hospitality holding company, where the primary business is the ownership and operation of casino resorts, which includes offering gaming, hotel, convention, dining, entertainment, retail and other resort amenities, will report earnings this morning, with analysts expecting the company to announce earnings of $0.06 per share and revenue of $2.41 billion for the quarter.
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With the Chinese government's crackdown on corruption, increased high-roller scrutiny and a partial smoking ban causing a major problem for gambling in
Macau, which has caused gaming revenue to fall for the eighth consecutive month up until January, down 17.4% year over year. February is expected to be much worse -- with analysts anticipating a 35% to 42% decline over 2014 levels.
Combine this with U.S.-based casino operators also seeing lower gaming revenue from Sin City. After four years of annual gains, gambling revenue on the Las Vegas Strip fell 2.1% in 2014, according to the Gaming Control Board.
And MGM Resorts International is at the forefront of this situation having lofty valuations, high debt levels and poor technicals, which should see a sell-off after the earnings report.
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