Must-know: MGM’s relative share price performance


Nov. 20 2020, Updated 5:23 p.m. ET

Recent performance

Share prices for most of the gambling stocks declined significantly over the last three months. Melco Crown Entertainment (MPEL) collapsed by 21.7%. It was followed by MGM Resorts’ (MGM) 14.9% decline. Las Vegas Sands (LVS), Boyd Gaming (or BYD), and Wynn Resorts (WYNN) declined 12.5%, 10.4%, and 9.2%, respectively, during the same time period.

However, share prices for all of these companies showed improved performance over the last week. For instance, BYD surged 8.4%. It was followed by LVS and MGM at 5.6% and 4.6%, respectively. MPEL and WYNN strengthened ~3.3%.

MGM’s relative performance

The above chart shows that MGM’s peers—like WYNN, LVS, and MPEL—outperformed MGM and the S&P 500 over the last five years.

MGM returned ~77% over the last five years—compared to peer group average return of ~180%. MPEL had the maximum return of ~307% among its peers. It was followed by LVS’ return of ~258%. BYD had a negative return of ~21% during the same time period.

A good way for investors to get exposure to these companies is to invest in an exchange-traded fund (or ETF) like the Consumer Discretionary Select Sector SPDR Fund (XLY).

However, if we look at the year-to-date (or YTD) performance, MGM outperformed the peer group. It had a negative return of 7.4%—compared to its peer group’s negative return of ~23.3% during the same period.

In the next part of the series, we’ll discuss how MGM’s mass table win outperformed the market.

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