MGM Growth Properties LLC (MGP): Are Hedge Funds Right About This Stock?

Is MGM Growth Properties LLC (NYSE:MGP) a good bet right now? We like to analyze hedge fund sentiment before doing days of in-depth research. We do so because hedge funds and other elite investors have numerous Ivy league graduates, expert network advisers, and supply chain tipsters working or consulting for them. There is not a shortage of news stories covering failed hedge fund investments and it is a fact that hedge funds’ picks don’t beat the market 100% of the time, but their consensus picks have historically done very well and have outperformed the market after adjusting for risk.

MGM Growth Properties LLC has experienced an increase in activity from the world’s largest hedge funds recently. MGP was in 15 hedge funds’ portfolios at the end of the third quarter of 2018. There were 14 hedge funds in our database with MGP holdings at the end of the previous quarter. This wasn’t enough for the company to be considered as on of the 30 most popular stocks among ALL hedge funds.

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 17.4% year to date and outperformed the market by more than 14 percentage points this year. This strategy also outperformed the market by 3 percentage points in the fourth quarter despite the market volatility (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

MGM Resorts reported impressive results in the third quarter, with adjusted earnings of 24 cents trumping the consensus estimate of 18 cents. Including gains from the sale of Mandarin Oriental Las Vegas, the bottom line came in at 26 cents, flat over the year-ago period.

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Disclosure: None.

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