Mirage Hotel sold for $1.075B

Hard Rock International to buy The Mirage Hotel & Casino from MGM

MGM Resorts International (MGM) announced an agreement with Hard Rock International to sell the operations of The Mirage Hotel & Casino (“The Mirage”). The deal, which is valued at $1.075 billion in cash. The deal is likely to be completed in the second half of 2022, subject to regulatory approvals.

The Mirage, which was opened in 1989, was acquired by MGM Resorts in 2000. Per the agreement, MGM Resorts will retain “The Mirage name and brand, licensing it to Hard Rock royalty-free for a maximum period of three years while it finalizes its plans to rebrand the property.”

MGM Resorts anticipates net cash proceeds following taxes and estimated fees to be nearly $815 million. 

Goldman Sachs

Goldman Sachs analyst Stephen Grambling notes that MGM Resorts (MGM) announced it has entered into an agreement to sell the operations of The Mirage to Hard Rock International for $1.075B in cash and $815M after taxes and estimated fees.

Concurrently, VICI Properties (VICI) announced that in connection with the deal, they have agreed to enter into a new separate lease with Hard Rock related to the operations of the Mirage with similar terms as the current MGM Master Lease, Grambling adds, highlighting that VICI has entered into an agreement to purchase MGP, of which MGM is a controlling shareholder.

The analyst believes the deal could be a strategic positive to MGM given the potential to drive deleveraging for the enterprise. He also notes the property had seen improving margins but decelerating growth pre-pandemic, and may require substantial capex to be reinvigorated. The deal therefore would allow MGM to focus on capital allocation elsewhere, the analyst argues. Grambling has a Neutral rating on MGM Resorts with a price target of $49.

CBRE

CBRE analyst John DeCree called this a “record multiple” as well as a “winner, winner, chicken dinner deal for all parties involved, plus some bystanders,” such as Wynn (WYNN) and Caesars (CZR), who have significant Las Vegas exposure.

Mirage sets a new bar for Las Vegas operating company valuation, which makes DeCree tell investors that he “can’t help but get excited about the prospects” for Caesars, which is planning to sell one of its Vegas resorts in early 2022, and Wynn, which “is sitting on what is arguably the most valuable casino resort in Las Vegas, if not the country,” according to the analyst. DeCree has Buy ratings on MGM, Caesars and Wynn shares.

MGM is up $1.26 to $41.60.

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Caesars Entertainment sold for $17.3 B

Eldorado Resorts to acquire Caesars for $12.75 per share, or about $17.3B

Eldorado Resorts to buy Caesars for $17.3B, Stockwinners

Eldorado Resorts (ERI) and Caesars Entertainment (CZR) announced that they have entered into a definitive merger agreement to create the largest U.S. gaming company.

Caesars Entertainment sold for $17.3 billion, Stockwinners

Eldorado will acquire all of the outstanding shares of Caesars for a total value of $12.75 per share, consisting of $8.40 per share in cash consideration and 0.0899 shares of Eldorado common stock for each Caesars share of common stock based on Eldorado’s 30-calendar day volume weighted average price per share as of May 23, reflecting total consideration of approximately $17.3B, comprised of $7.2B in cash, approximately 77M Eldorado common shares and the assumption of Caesars outstanding net debt.

Caesars shareholders will be offered a consideration election mechanism that is subject to proration pursuant to the definitive merger agreement.

Giving effect to the transaction, Eldorado and Caesars shareholders will hold approximately 51% and 49% of the combined company’s outstanding shares, respectively.

Upon completion of the transaction the combined company will retain the Caesars name to capitalize on the value of the iconic global brand and its legacy of leadership in the global gaming industry.

The new company will continue to trade on the Nasdaq Global Select Market.

The combined company’s Board of Directors will consist of 11 members, six of whom will come from Eldorado’s Board of Directors and five of whom will come from Caesars Board of Directors.

The transactions have been unanimously approved by the Boards of Directors of Eldorado, Caesars and VICI.

The Caesars transaction is subject to approval of the stockholders of Eldorado and Caesars, the approval of applicable gaming authorities, the expiration of the applicable Hart-Scott-Rodino waiting period and other customary closing conditions, and is expected to be consummated in the first half of 2020.


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Tropicana Entertainment sold for $1.85B

Eldorado Resorts to acquire Tropicana Entertainment in $1.85B transaction 

Tropicana Entertainment sold for $1.85B, Stockwinners
Tropicana Entertainment sold for $1.85B, 

Eldorado Resorts (ERI) announced that it entered into a definitive agreement to acquire Tropicana Entertainment (TPCA) in a cash transaction that is valued at $1.85B.

The definitive agreement provides that Gaming and Leisure Properties (GLPI) will pay $1.21B, excluding taxes and expenses, for substantially all of Tropicana’s real estate and enter into a master lease with Eldorado for the acquired real estate and that Eldorado will fund the remaining $640M of cash consideration payable in the acquisition.

Tropicana Entertainment sold for $1.85B, Stockwinners.com
Tropicana Entertainment sold for $1.85B, 

 

The transaction is expected to be immediately accretive to Eldorado’s free cash flow and diluted earnings per share, inclusive of identified expected cost synergies of approximately $40M in the first year following its completion and when giving effect to the lease transaction described below.

Pursuant to the transaction, GLPI is expected to acquire the real estate associated with the Tropicana property portfolio, except the MontBleu Casino Resort & Spa in South Lake Tahoe and the Tropicana Aruba Resort and Casino.

Following the acquisition of the real estate portfolio by GLPI, Eldorado will enter into a triple net master lease for the acquired properties with an initial term of 15 years, with renewals of up to 20 years at the Eldorado’s option.

The initial annual rent under the terms of the lease is expected to be approximately $110M.

Tropicana intends to dispose of Tropicana Aruba Resort and Casino prior to closing.

Eldorado’s net purchase price after the application of Tropicana’s expected net cash on hand and cash flow generated from operations through closing represents an estimated trailing twelve months EBITDA multiple of approximately 6.6x at closing.

Including the $40M of identified cost synergies, the purchase price multiple is expected to be below 5.0x.

The board of directors of each of Eldorado, GLPI and Tropicana approved the transaction, which is expected to close by the end of 2018, subject to receipt of required regulatory approvals and satisfaction of other customary closing conditions.

Eldorado intends to fund the transaction consideration of approximately $640M payable by Eldorado and repay debt outstanding under Tropicana’s credit facility with cash generated from its current operations, proceeds from pending asset sales, Tropicana’s cash on hand, cash flow generated from Tropicana operations through closing and $600M of committed debt financing from J.P. Morgan.


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Wynn Resorts CEO Steve Wynn steps down

Wynn Resorts CEO Steve Wynn steps down, Matt Maddox named CEO

Wynn Resorts CEO Steve Wynn steps down. Stockwinners.com
Wynn Resorts CEO Steve Wynn steps down

Wynn Resorts (WYNN) released the following statements today regarding Chairman and CEO Steve Wynn:

The board of Wynn Resorts reluctantly announced that it accepted the resignation of Steve Wynn as CEO and Chairman of the board. The board has appointed Matt Maddox, currently President of the company, as its CEO, and Boone Wayson as Non-Executive Chairman of the board, effective immediately.

“It is with a collective heavy heart, that the board of Wynn Resorts accepted the resignation of our founder, CEO and friend Steve Wynn,” said non-executive director of the board Boone Wayson.

“Steve Wynn is an industry giant. He is a philanthropist and a beloved leader and visionary. He played the pivotal role in transforming Las Vegas into the entertainment destination it is today. He also assembled a world-class team of executives that will continue to meet the high standards of excellence that Steve Wynn created and the Wynn brand has come to represent.”

Steve Wynn created modern Las Vegas. He transformed the city into an economic powerhouse by making it a world-wide tourist destination.

He designed, built and operated the most iconic resorts on the Las Vegas strip, beginning with the Mirage, then Treasure Island, the Bellagio, Wynn Las Vegas and Encore at Wynn Las Vegas.

Wynn Macau, Wynn’s first resort in the SAR of Macau in China, was designated by Forbes Travel Guide as the best resort in the world.

Along with Wynn Palace in Cotai, the company built by Steve Wynn has been recognized as having more Five Star awards than any independent hotel company in the world.

Wynn Resorts remains as committed as ever to upholding the highest standards and being an inclusive and supportive employer. In fact, more than 40% of all Wynn Las Vegas management are women; the highest in the gaming industry.

The company will continue to fully focus on its operations at Wynn Macau, Wynn Palace and Wynn Las Vegas; the development and opening of the first phase of Wynn Paradise Park, currently under construction on the former Wynn golf course; as well as the construction of Wynn Boston Harbor, which will open in June 2019.

Details of Mr. Wynn’s separation agreement will be disclosed when they are finalized.

Steve Wynn released the following statement: “In the last couple of weeks, I have found myself the focus of an avalanche of negative publicity. As I have reflected upon the environment this has created – one in which a rush to judgment takes precedence over everything else, including the facts – I have reached the conclusion I cannot continue to be effective in my current roles.

Therefore, effective immediately, I have decided to step down as CEO and Chairman of the Board of Wynn Resorts, a company I founded and that I love.

The Wynn Resorts team and I have built houses of brick. Which is to say, the institution we created – a collection of the finest designers and architects ever assembled, as well as an operating philosophy now ingrained in the minds and hearts of our entire team – will remain standing for the long term. I am extremely proud of everything we have built at this company.

Most of all, I am proud of our employees. The succession plan laid out by the board and which I wholeheartedly endorse now places Matt Maddox in the CEO seat.

With Matt, Wynn Resorts is in good hands. He and his team are well positioned to carry on the plans and vision for the company I created. I want to thank all of the employees who have made Wynn Resorts the most admired resort company in the world, and for the support I have received from them in recent weeks.

Most importantly, I want everyone to continue to be proud of this company and the many unique ways it will forever continue to delight guests.”

WYNN closed at $163.22, it last traded at $176.34.


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Barron’s is bullish on Morgan Stanley and Samsung

Barron’s, the weekly publication owned by the Wall Street Journal, in its latest issue mentions several names: 

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BULLISH  MENTIONS

Caesars looks ready to grow again – After a disastrous 2008 leveraged buyout, Wall Street seems to have warmed to Caesars (CZR) story this year in a strong market for casino operators, Andrew Bary writes in this week’s edition of Barron’s. With a bankruptcy filing settled, the company’s shares have surged this year, and the gambling giant could hit $18, up 50% in the next 18 months, he adds.

Coach shares look undervalued, could rise nearly 30% – Coach (COH), which has announced that it would be changing its name to Tapestry, is finally on the right path to growth, Emily Bary writes in this week’s edition of Barron’s. Recent acquisitions and brand-loyalty initiatives should help the company maintain its market share, and in the next 12 months the shares could return nearly 30%, including dividends, she adds.

DowDuPont shares likely to return as much as 30% over next year – If DowDuPont (DWDP) can cut $3B from its yearly costs and attract a higher valuation by splitting into three parts, the shares stand to return 15%-30% over the next year, including dividends, Jack Hough writes in this week’s edition of Barron’s.

Lufthansa has more room to climb – Amid competitor’s troubles, Lufthansa (DLAKY) has scored an “upgrade to first class,” Victor Reklaitis writes in this week’s edition of Barron’s. However, several bulls say other factors will be bigger drivers, seeing the stock’s price rising to $35.36 due to a range of tailwinds, and implying a rally of about 20%, he adds.

Another 20% gain in Morgan Stanley stock likely – In a follow-up story, Barron’s says Morgan Stanley’s (MS) strategic response to the financial crisis proves more resilient than others,’ and another 20% gain in the stock is likely.

Samsung has lots of upside driven by chips/screens – Samsung (SSNLF)  stock is up 50% this year and it is still cheap, Assif Shameen writes in this week’s edition of Barron’s. While the company is known for smartphones, Samsung lives off semiconductors and screens, with analysts estimating that chips will generate 70% of profits and screens 13%, he adds.

BEARISH MENTIONS

Market pounds United, sees American/Delta as possibly safe bets – United Continental’s (UAL) earnings were bad news for the company, with shares dropping after the carrier reported better than expected earnings but offered guidance that suggested that its fourth quarter earnings would miss, Ben Levisohn writes in this week’s edition of Barron’s. While Delta Air Lines (DAL) and American Airlines (AAL) followed their peer lower, their shares did not go much lower, as the Market seems to see the two airlines as possibly safe bets, he adds.

Regulators inquiries fuel speculation about big tech breakup – Facebook (FB), Amazon (AMZN) and Alphabet (GOOG; GOOGL) deserve a lot of the credit for last week’s record stock market highs but their positive effect will now depend on how they respond to U.S. and European regulators, Tiernan Ray writes in this week’s edition of Barron’s. European inquiries and those from the U.S.’s Federal Trade Commission have prompted speculation about the breakup of these companies, he adds. And it is not only antitrust issues that are in play, as many see the huge amounts of personal data that these companies are amassing as troubling, Ray contends.


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Barron’s is bullish on JD.com, Softbank

Barron’s, the weekly publication owned by the Wall Street Journal, in its latest issue mentions several names: 

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M&A may be easiest way for Google to catch-up in the Cloud – Alphabet’s (GOOG; GOOGL) Google has been chasing competitors Amazon (AMZN) and Microsoft (MSFT) in cloud computing, Tiernan Ray writes in this week’s edition of Barron’s. The easiest way to close in may be through M&A, the publication notes, with rumors saying Alphabet could contemplate a deal as large as buying Workday (WDAY) or Salesforce (CRM).

JD.com could rise 25% or more – With the China Single’s Day – the biggest shopping day of the year – less than a month away, investors looking for growth stocks in the country may want to look to JD.com (JD), its number two online retailer after Alibaba (BABA), Jack Hough writes in this week’s edition of Barron’s. JD.com stock could gain 30% or more in the next year, he adds.

Post-Peltz, P&G must to do more than cut costs – Last week, Procter & Gamble (PG) announced that its eleven standing board members won re-election, while activist Nelson Peltz had not won a seat, Vito Racanelli writes in this week’s edition of Barron’s. Nonetheless, Peltz has yet to concede, saying the vote remains too close to call, with an independent inspector expected to certify the results, the publication adds. Management’s victory means that its CEO David Taylor is on “a short leash,” facing the task of doing more than just cutting costs, Racanelli contends.

Softbank shares can still go higher – SoftBank (SFTBF) is reportedly ready to announce a $10B deal to buy up to 17% of Uber, as it negotiates a merge of its Sprint (S) unit with rival T-Mobile (TMUS) to challenge Verizon (VZ) and AT&T (T), Assif Shameen writes in this week’s edition of Barron’s. SoftBank stock is up 27% year to date and 140% from the lows of February 2016, but its shares can go still higher, the publication adds.

Time to rethink how to play Wal-Mart. – Wal-Mart (WMT) has had a good run, so it is time to rethink how to play the stock, Steven Sears writes in this week’s edition of Barron’s. The sell-side analyst community may spend the next few months getting bullish on Wal-Mart’s digital future, while realizing that more than 4,000 retail stores offer competitive advantages, Sears noted, adding that the November earnings report should provide additional evidence for “analysts to update earnings models, raise price targets, and hike investment ratings.”


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Barron’s is bullish on GM, China Mobile

Barron’s, the weekly publication owned by the Wall Street Journal, in its latest issue mentions several names: 

Stockwinners offers Barron's review of Stockwinners offers stocks to buy, stocks to watch, upgrades, downgrades, earnings, Stocks to Buy On Margin

BULLISH  MENTIONS

Activision to continue earnings growth from in-game spending – Activision Blizzard (ATVI) started encouraging more in-game spending, getting users to pay for new weapons, new missions, and new virtual outfits within titles they owned and as a result its stock soared since the beginning of the year, Emily Bary writes in this week’s edition of Barron’s. Smaller competitors have also ramped up recurring spending, with shares of Electronic Arts (EA) and Take-Two Interactive Software (TTWO) also jumping in 2017, she notes. Bary adds game makers should continue to see strong earnings growth from in-game spending.

China Mobile looks cheap, but there may be a catch – China Mobile (CHL) has $60B of net cash, equal to 30% of its market shares, Andrew Bary writes in this week’s edition of Barron’s. But many fear the Chinese government, which owns 73% of the company, will divert it to prop up other enterprises, he notes, adding that as a result the company’s shares have performed poorly in the last few years.

Cognizant is returning cash to investors – Cognizant (CTSH) is building a lucrative digital-consulting business, Resham Kapadia writes in this week’s edition of Barron’s. Meanwhile, the company’s shareholders could see a twofold payoff thanks to activist investor Elliott Management, which took a 4% stake last November, acquired three board seats, and pressed management to prioritize profit-margin expansion, the publication noted, adding that Cognizant will return $3.4B through 2018 via stock buybacks and dividends.

GM (GM) well-placed to make self-driving, battery-powered cars – In a follow-up story, Barron’s says General Motors has become an autonomously driven stock, climbing to $45 on chatter over GM being well-placed to make the self-driving, shared, battery-powered cars of the future. GM remains more than 60% cheaper than the S&P 500, the publication noted, adding that investors should hold out for more upside, and the 3.4% dividend yield.

BP, Royal Dutch Shell dividends look safe – Foreign companies tend to favor paying dividends over buying back stock, Lawrence Strauss writes in this week’s edition of Barron’s. BP (BP), Enel, ING Group (ING), Royal Dutch Shell (RDS.A), TSMC (TSM) and WPP (WPPGY) dividends all look safe, Strauss notes, adding that with the exception of Royal Dutch Shell and BP, they are all expected to pay higher dividends in 2018 than in 2017.

Nvidia stock/options market disconnection an opportunity – While Nvidia (NVDA) is “red hot” in the stock market, it is “lukewarm” in the option market, which creates an “intriguing” opportunity, Steven Sears writes in this week’s edition of Barron’s.

E-Commerce helping Wal-Mart ‘jump-start stalled revenue – While Wal-Mart (WMT) has played in online shopping since 2000, it got a boost a year ago with its $3.3B acquisition of Jet.com, Jack Hough writes in this week’s edition of Barron’s. As an e-Commerce player, Wal-Mart is growing faster than Amazon (AMZN) has in years, and shareholders will benefit, he adds.

BEARISH  MENTIONS

Costco shares still fell despite good quarter– Since Amazon (AMZN) announced its acquisition of Whole Foods, Costco (COST) has been “on the ropes,” Ben Levisohn writes in this week’s edition of Barron’s. The retailer shares have dropped 12% since then, even as the company delivers earnings beats and same-store sales increases, he adds.

RH shares fully priced – Combined with July-quarter report, RH‘s shares (formerly known as Restoration Hardware) buyback has lifted its stock 146% this year and “squeezed those unwelcome guests called short sellers,” Bill Alpert writes in this week’s edition of Barron’s. But now RH shares look fully priced, and is one of the most richly priced retailers around, he adds.

Gun shares look overvalued – Tragedies involving guns and political pronouncement about gun violence tend to move shares of publicly traded firearms companies, such as Sturm Ruger (RGR), American Outdoor Brands (AOBC) and Vista Outdoor (VSTO), Vito Racanelli writes in this week’s edition of Barron’s. But with prospects dim for stricter gun control, an impetus for long-term sales growth is lacking, he notes, adding that the stocks look overvalued.


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Changes to S&P Indices

S&P announces changes to S&P MidCap 400, S&P SmallCap 600 indices

Stocks to buy, stocks to watch, upgrades, downgrades, earnings S&P Dow Jones Indices will make the following changes in the S&P MidCap 400 and S&P SmallCap 600 indices effective prior to the open of trading on Monday, October 2:

Six Flags Entertainment (SIX) will replace PAREXEL International (PRXL) in the S&P MidCap 400. Pamplona Capital Management is acquiring PAREXEL in a deal expected to be completed soon pending final conditions.

S&P SmallCap 600 constituent Sterling Bancorp (STL) will replace Oil States International (OIS) in the S&P MidCap 400, and

KEMET (KEM) will replace Astoria Financial (AF) in the S&P SmallCap 600, and

Oil States will replace Sterling Bancorp in the S&P SmallCap 600. Sterling Bancorp is acquiring Astoria in a deal expected to be completed soon pending final closing conditions. Post merger, Sterling Bancorp will be more representative of the mid-cap market space. Oil States is more representative of the small-cap market space.


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The Real Winners of Mayweather McGregor Fight

CBS will broadcast the fight on radio while its subsidiary, Showtime charges $100 for pay-per-view

The real winner of Mayweather vs McGregor. See Stockwinners.com to read more

Tonight’s matchup between Floyd Mayweather and Conor McGregor has been called the “The Money Fight.” You may ask why?  The $99.95 high-definition price tag on CBS Corp.’s Showtime is the highest ever charged for a pay-per-view event. CBS (CBS) expects about 4.9 million viewers will sign up for the broadcast.

It is the most distributed event in pay-per-view history. It will be shown in in over 200 countries on pay-per-view.

WINNERS

CBS has deals with other companies to show the fight live. Buffalo Wild Wings (BWLD) will show the fight at most of its 1,220 restaurants. Stocks of BWLD and CBS are probably worth watching more than the fight itself!

It is estimated that  $700 million revenue will be generated from pay-per-view buys, ticket sales and other sources of income, according to sources. By comparison, Mayweather’s record-breaking match with Pacquiao in 2015 raked in an estimated $600 million. And let’s not forget tickets to the T-Mobile Arena, sponsorships, simulcast rights, merchandise and the many peripheral activities — gambling, hotel stays, meals — leading up to the big day on the Las Vegas Strip.

Japan’s boxing fans can view the fight with their smartphone and a $15 subscription to DAZN, a UK-owned sports streaming service that’s seeking to turn sports nuts into cord cutters.  This is a new business model for pay-per-view.

“Mayweather vs. McGregor truly is a unique event and I doubt there will ever be one quite like it in the future,” said CEO of DAZN James Rushton. “We are analyzing how fans react to having this fight on DAZN and will evaluate if it’s something we want to continue doing in the future.”

Floyd Mayweather is expected to have a $300 million payday while McGregor is set to earn anywhere from $50 million to $100 million, according to various estimates.

[youtube https://www.youtube.com/watch?v=8oXy51JvkFY&w=640&h=360]

The last time Mayweather lost was in 1996, in a highly controversial decision at the semi-finals of the Atlanta Olympic Games, to Bulgarian Serafim Todorov. Even the Egyptian referee for the fight assumed Mayweather had won and held Mayweather’s hand aloft just as Todorov was announced as the winner.  It would seem a mistake to bet against Mayweather now!

LOSERS

The biggest loser of the night will be HBO and its parent company Time Warner or soon to be AT&T (T).

With no real challengers remaining in boxing this year, Mayweather turned to the UFC and its biggest star, Conor McGregor. According to insiders, he timed the announcement and staged the fight in a manner designed to deal maximum damage to his former network partner, HBO, and two of their biggest pay-per-view fights of 2017.

Begin with the choice of an Aug. 26 fight date. “It’s perverse,” tells Bloomberg Jim Lampley, HBO boxing’s longtime commentator. “If there’s one indelible, accepted principle in operating pay-per-view, it’s ‘never before Labor Day.’

That’s why, for the upcoming HBO bout between middleweight titleholder Gennady Golovkin and former champ Canelo Alvarez—one of boxing’s best tilts, on paper, in years—the channel jumped on Sept. 16 to maximize the number of pay-per-view buys, assuming that Showtime would choose a later date in the fall for Mayweather-McGregor.

Instead, Mayweather-McGregor was set for Aug. 26, creating a tidal wave of publicity that is currently drowning the lead-up to the Canelo-Golovkin fight.

ODD MAKERS

The action is reflected in the odds, which bookmakers adjust either way as money comes in on the two fighters. Bookmakers have been lowering the odds steadily since the fight was announced, but even that hasn’t stopped the deluge of McGregor bets.

The big bettors are putting their money on Mayweather, who is 49-0 as a pro. But so many McGregor fans are betting small amounts that the betting slips were running 18-1 in the Irish fighter’s favor. McGregor fans have flooded sports books with $100 bills backing the mixed martial arts fighter, and even a late surge of money on Mayweather might not be enough to balance the books.

A fight that began with Mayweather an 11-1 favorite is now 5-1 or even less in some sports books.

Should McGregor somehow manage to knock out Floyd Mayweather Jr. in the early rounds Saturday night, Las Vegas’ bookmakers would lose millions of dollars in the biggest single event loss in the history of sports betting, according to Fox Business


Floyd Mayweather vs Conor McGregor

Date: Saturday, Aug. 26, 2017
Time: 9 p.m. ET
Location: T-Mobile Arena in Las Vegas


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Priceline and Tripadvisor Sink Following Earning Reports

Priceline, Tripadvisor sink as competition weighs on OTAs

Travel-Agent-Cartoon

The shares of online travel agencies Priceline (PCLN) and Tripadvisor (TRIP) are falling after Priceline’s Q3 profit guidance came in below expectations and Tripadvisor reported that its transaction revenue per hotel shopper fell last quarter.

PRICELINE

Priceline reported Q2 earnings per share, excluding some items, of $15.14, versus the consensus outlook of $14.20. The company’s revenue came in slightly above expectations. However, it provided Q3 EPS guidance, excluding some items, of $32.40-$34.10, versus the consensus outlook of $34.20.

TRIPADVISOR

Tripadvisor reported Q2 EPS of 38c, versus the consensus outlook of 30c. The company’s revenue came in slightly above expectations. However, it reported that its TripAdvisor-branded click-based and transaction revenue per hotel shopper decreased 2% year-over-year.

REACTION ON PRICELINE

Priceline failed to beat its guidance last quarter for the first time since 2012, wrote Cowen analyst Kevin Kopelman. The analyst blamed this development on tougher competition from #Expedia (EXPE) and “heavy Asia discounting.”

However, he says the high end of the company’s Q3 EPS guidance is “solid,” and he kept a $2.250 price target and a Buy rating on the shares.

Priceline’s room night growth did not beat the high end of its guidance and the company provided “disappointing” Q3 room night guidance, wrote Credit Suisse’s Paul Bieber.

Although “conservatism” could be a factor behind these developments, the company’s comments about the return on its marketing investments and its competition in Asia will probably hurt sentiment towards the company until it shows that its Q3 results will surpass its guidance, #Bieber believes.

However, citing what he sees as “a favorable demand environment with healthy macro trends and no significant changes to the competitive landscape in core Western markets,” Bieber kept an Outperform rating on Priceline shares. He did, however, cut his price target on the stock to $2,070 from $2,150.

Priceline tends to grow at the slowest rate in Q3 because Europe, the company’s most mature market, makes up a greater share of its revenue than in other quarters, wrote #Barclays analyst Ross #Sandler. Moreover, the company has a tough comparison this quarter, the analyst stated.

Additionally, Priceline is gaining market share in most areas, and its supply, “continues to grow at a very healthy rate,” wrote Sandler, adding that supply is “a leading indicator” for the company. He recommends buying the shares “selectively on weakness.”

REACTION ON TRIPADVISOR

TripAdvisor, which “continues to stumble,” blamed the decline in its revenue per hotel shopper on “a faster than anticipated shift to lower monetizing mobile users,” wrote Piper’s Michael #Olson.

Going forward, there are questions about how TripAdvisor will deal with lower monetization as mobile users make up a high percentage of its visitors, the analyst stated. He expects the stock to remain “range-bound” for the rest of the year, and he kept a Neutral rating on the shares.

However, he expects the company to improve its monetization over the longer term and advises longer term investors to start evaluating the stock now.

PRICE ACTION

In Wednesday’s trading, Priceline sank 8% to $1,884 and Tripadvisor fell 6% to $37 per share.

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Stock Upgrades Downgrades for July 18, 2017

Stockwinners’ analysts upgrades, downgrades and initiations for July 18, 2017

Everyday, we will e-mail our readers a list of analysts actions as shown below. Please see below on how to sign up for Stockwinners’ Service.

 

STOCK UPGRADES

CMG Chipotle to Buy from Hold at Maxim
CMG Chipotle to Buy on queso launch at Maxim
IPXL Impax to Neutral from Underweight at Piper Jaffray
MMP Magellan Midstream to Buy from Neutral at UBS
NFLX Netflix to Buy from Neutral at Rosenblatt
OAS Oasis Petroleum to Buy from Hold at Williams Capital
ORLY O’Reilly Automotive to Buy from Neutral at Northcoast
QDEL Quidel to Outperform from Market Perform at William Blair
SC Santander Consumer to Outperform from Market Perform at JMP Securities
SEAS SeaWorld to Neutral from Sell at Goldman Sachs
SEDG SolarEdge to Outperform at Oppenheimer
SEDG SolarEdge to Outperform from Perform at Oppenheimer
SKX Skechers to Positive from Mixed at OTR Global

DOWNGRADES

ADP ADP to Equal Weight from Overweight at Barclays
CCJ Cameco to Underperform at Credit Suisse
COG Cabot Oil & Gas to Hold from Buy at Williams Capital
DDC Dominion Diamond to Market Perform from Outperform at BMO Capital
DDC Dominion Diamond to Hold from Buy at Gabelli
DNN Denison Mines to Underperform from Neutral at Credit Suisse
EXLS ExlService to Neutral from Buy at Citi
FMC FMC Corporation to Neutral from Buy at Seaport Global
FPI Farmland Partners to Market Perform from Outperform at FBR Capital
IPGP IPG Photonics to Hold from Buy at Canaccord
NYLD NRG Yield to Hold from Buy at Deutsche Bank
OAS Oasis Petroleum to Hold from Buy at Deutsche Bank
OAS Oasis Petroleum to Hold at Deutsche Bank
QEP QEP Resources to Hold from Buy at Deutsche Bank
SSL Sasol to Neutral from Overweight at JPMorgan
UAA Under Armour to Negative from Mixed at OTR Global

STOCK INITIATIONS

DC Agree Realty with a Buy at Canaccord
ADRO Aduro Biotech with an Outperform at Cowen
ALBO Albireo Pharma with a Buy at Needham
BFAM Bright Horizons with a Buy at Citi
BHGE Baker Hughes resinstated with a Sell at Goldman Sachs
CVNA Carvana with a Neutral at Wedbush
FANG Diamondback Energy with an Outperform at Imperial Capital
FCPT Four Corners Property Trust with a Hold at Canaccord
GOOD Gladstone with a Hold at Canaccord
GPMT Granite Point Mortgage with an Overweight at JPMorgan
GPMT Granite Point Mortgage with a Market Perform at Keefe Bruyette
GTY Getty Realty with a Buy at Canaccord
INFN Infinera with a Buy at Craig-Hallum
MSCI MSCI with an Equal Weight at Barclays
MTDR Matador with an Outperform at Imperial Capital
O Realty Income with a Buy at Canaccord
OMF OneMain Holdings with a Buy at DA Davidson
REN Resolute Energy with an Outperform at Imperial Capital
RM Regional Management with a Neutral at DA Davidson
TAL TAL Education with a Neutral at Citi
TWOU 2U with a Buy at Citi
WPX WPX Energy with an Outperform at Imperial Capital

STOCKWINNERS

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Macau Casinos Drop on Money Laundering Probe

Macau gaming names slide after Daiwa uncovers junket operator warning

Macau gaming names slide on money laundering probe. See Stockwinners.com Market Radar for the latest.

Shares of several Macau gaming stocks are lower after #Daiwa analyst Jamie Soo told investors that his checks uncovered that a memo was distributed to customers and key staff by “one of Macau’s largest” #junket operators warning of recently heightened enforcement of anti-money laundering initiatives in both China and #Macau.

The junket operator advised its customers to withdraw funds out of “underground” bank accounts, which is the first time such a dissemination has occurred to Soo’s knowledge, he informed clients.

The expected further heightening of enforcement continues to be reaffirmed given this news and other events over the past six months, added #Soo, who said he remains Neutral on the Macau gaming sector.

Stocks to watch

Las Vegas Sands (LVS) MGM Resorts (MGM), Wynn Resorts (WYNN) and Melco Resorts (MLCO).

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The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Fed Chair Tells Congress ‘Gradual’ Rate Raises Likely

Fed Chair to tell Congress ‘gradual’ rate raises likely appropriate  

FOMC raised rates by 25 bp

Federal Reserve Chair Janet #Yellen will tell Congress in her semiannual monetary policy report, “Considerable uncertainty always attends the economic outlook. There is, for example, uncertainty about when–and how much–inflation will respond to tightening resource utilization. Possible changes in fiscal and other government policies here in the United States represent another source of uncertainty.

In addition, although the prospects for the global economy appear to have improved somewhat this year, a number of our trading partners continue to confront economic challenges.

At present, I see roughly equal odds that the U.S. economy’s performance will be somewhat stronger or somewhat less strong than we currently project…The Committee continues to expect that the evolution of the economy will warrant gradual increases in the federal funds rate over time to achieve and maintain maximum employment and stable prices.

That expectation is based on our view that the federal funds rate remains somewhat below its neutral level–that is, the level of the federal funds rate that is neither expansionary nor contractionary and keeps the economy operating on an even keel. Because the neutral rate is currently quite low by historical standards, the federal funds rate would not have to rise all that much further to get to a neutral policy stance.

But because we also anticipate that the factors that are currently holding down the neutral rate will diminish somewhat over time, additional gradual rate hikes are likely to be appropriate over the next few years to sustain the economic expansion and return inflation to our 2 percent goal.

Even so, the Committee continues to anticipate that the longer-run neutral level of the federal funds rate is likely to remain below levels that prevailed in previous decades.”

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The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

MetLife to Buy Fortress Investment’s Logan for $250 Million

MetLife to acquire Logan Circle Partners for roughly $250M in cash

Stockwinners offers real time news and information since 1998

MetLife (MET) and Fortress Investment Group (FIG) announced a definitive agreement for MetLife to acquire Logan Circle Partners, L.P., Fortress’ traditional fixed income asset management business, for approximately $250M in cash.

Following the anticipated separation of Brighthouse Financial next month and assuming the closing of the Logan Circle Partners acquisition, MetLife’s Investment Management business would have more than $560B in total assets under management, of which more than $140B would be managed on behalf of third parties.

Under the terms of the agreement, MetLife will acquire 100% of Fortress’ ownership stake in Logan Circle Partners.

This transaction will not impact MetLife’s existing $3B repurchase authorization, which is expected to be completed by year-end 2017. The transaction is subject to customary closing conditions and regulatory approvals, and is expected to close in the third quarter of 2017.

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The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Scientific Games Options Are Active!

Yesterday 8,000 contract of January $25 Call options traded at $3.10 for $2.48M

Today 2,000 contracts of January $22 Call options at $4.50 each for $900k

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#ScientificGames Corporation $SGMS develops technology-based products and services, and associated content for the gaming, lottery, and interactive gaming industries worldwide. Its Gaming segment sells new and used gaming machines, electronic table systems, video lottery terminals (VLTs), conversion game kits, and spare parts; and slot, casino, and table-management systems, as well as leases VLTs and electronic table games.  It is also involved in supplying player loyalty programs.

The company holds its Annual Shareholders meeting on June 17th in Las Vegas. A review of the Company’s 14-a, its proxy statement, does not show any extraordinary items to be discussed at the meeting. Routine corporate actions such as confirmation of directors and its CPA are on the agenda. The company is scheduled to report its Q2 quarterly results on or about August 7th.  It reported its first quarter results on April 27th. It reported revenue of $725.40 and its EPS of  (-$1.14) was 42 cents below the estimates.

Price Action

$SGMS last traded at $23.60. It has a 52-week trading range of $8.07 – $24.55.

SGMS call options have been very active lately.

Option Action

  • Yesterday, a trader purchased 8,000 contract of January $25 Call options at $3.10 each. That is a bullish bet of $2.48 million.  Open Interest on the contract is 9,112 contracts.
  • Today, a trader purchased 2,000 contracts of January $22 Call options, $4.50 each for a total bullish bet of $900,000. Open Interest on the contract is 11,524 contracts.
  • Another trader today purchased 350 contract of October $22 call options at $3.60 each. That is a bullish outlay of $126,000. Open Interest on the contract is 19,709 contracts.

Based on the amount of money that is bet on this stock, we could speculate several reasons for the bet. The obvious guess would be that the company is a takeover target. Another speculation would be that the company may receive a new contract.

Whatever the news or event may be, someone is placing large long term bullish bets that SGMS is heading higher.

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The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

 

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