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Are MGM Resorts International (MGM)’s Recent Ownership and Insider Trends a Sign of Things to Come?

Recent insider trends for MGM Resorts International (NYSE:MGM) have caught the attention of investors. Insider data is useful because it can reveal what a company’s executives and largest shareholders feel about a stock. In this case, the data has some interesting things to say about how MGM might perform in the future.

Institutions own 79.45% of MGM Resorts International (MGM)’s shares. The total value of these holdings, in millions, is $14,790. Among active positions in the latest quarter, 246 holders increased their positions by a total of 81.04 million shares, 213 holders decreased the positions by a total of 58.82 million shares, and 56 holders held their positions. This works out to a net increase in ownership of 22.22 million shares, and suggests that institutions are feeling bullish about the stock.

Among new and sold out positions, 84 holders initiated new positions by a total of 44.58 million shares and 65 holders exited their positions by a total of 15.97 million shares. This nets out to an increase of 28.61 million shares and is a bullish sign for MGM.

In the last three months, insiders executed a total of 47 trades. 47 were sells. Insider ownership decreased by a total of 6.12 million shares, which suggests that MGM’s key executives are feeling less optimistic about the outlook for the stock. The data from the past twelve months tells a different story: insiders executed 13 buys and 88 sells, and ownership increased by a net of 22.8 million shares.



Comparing the number of shares sold short over time is a method analysts often use to get a reading on investor sentiment. MGM Resorts International (NYSE:MGM)’s short interest is 24.74 million shares, or 4.90% of the float. This represents a decrease of -6% in the number of shares being shorted compared to the previous reading, and implies that investors felt less pessimistic about the stock during the past two weeks.

In light of the insider ownership and trading data it makes sense to consider technicals to see if they come to a similar conclusion about the outlook for MGM. A composite of 13 technical indicators that includes measures such as moving averages and momentum oscillators suggests that MGM is a buy, which implies that MGM is expected to outperform the market based on prior trading patterns.

Conclusion




Institutional ownership trends suggest that the stock is cheap and the insider trading data indicates that insiders are bearish. Technical indicators (also) suggest that MGM Resorts International (NYSE:MGM) is undervalued.

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