MGM Most Added Consumer Cyclical Stock by Hedge Funds in Q2
MGM Most Added Consumer Cyclical Stock by Hedge Funds in Q2
Table of Contents
13F filings indicate MGM was a hedge fund favourite in Q2
It was the most added consumer cyclical equity by those money managers
MGM Resorts International (NYSE: MGM) was highlighted as the most added consumer discretionary stock among hedge funds in the second quarter, according to an analysis by Morgan Stanley based on Form 13F filings.
Based on the changes in positions among hedge funds, ownership of MGM shares surged by 4.8% between April and June. This increase is notable as it represents the largest hike among all consumer cyclical stocks owned by hedge funds.
For the operator of Bellagio, this takes a significant achievement, especially considering the longstanding preference of hedge funds for gaming equities. The second quarter’s filings also revealed that many managers boosted their investments in MGM’s competitors while some chose to reduce or exit positions in other gaming stocks.
Notably, MGM was the only gaming stock listed among the top three consumer discretionary additions by hedge funds. Additionally, no betting-related stocks were featured among the three largest reductions in hedge fund consumer cyclicals during that same quarter, as pointed out by Morgan Stanley.
Hedge Funds Rewarded for MGM Bets
Similar to other casino stocks, MGM has been a longstanding favourite for hedge funds and investors focused on special situations. The wagers those investors placed on MGM in the second quarter appear to have paid off.
After a downturn influenced by tariffs that caused short sellers to flock to the shares, MGM’s stock closed at $25.79 on April 8. However, it has skyrocketed to $36.10 since then, even in light of disappointing second-quarter results from the Las Vegas Strip and expectations for continued near-term challenges.
This trend has overshadowed the ongoing strength in the BetMGM segment and a rebound in gross gaming revenue (GGR) in Macau. Analysts have noted that while these elements could serve as potential catalysts, their impacts on MGM shares are moderated given the company’s ownership stakes: about 50% of BetMGM and approximately 56% of MGM China.
In the context of the struggles within Las Vegas, it could be argued that hedge funds made bold decisions by increasing their holdings of MGM in the second quarter. The fate of those who maintained their positions in the current quarter won’t be unraveled until the next round of Form 13F filings later this year.
MGM Catalysts
While hedge funds are typically discreet regarding their buy and sell strategies, in MGM’s case, these investors may have identified second-quarter value or anticipated several upcoming catalysts.
According to Jefferies analyst David Katz, occupancy at MGM casino hotels was solid during July weekends, and there are plans for room upgrades at the MGM Grand that will be completed in time for the Las Vegas Grand Prix in October.
Additionally, there is a significant likelihood that MGM’s Empire City Casino in Yonkers, NY, will gain permission to convert into a Las Vegas-style gaming venue when regulators award three downstate licenses later this year.
Key Takeaways
- MGM was the top consumer discretionary stock added by hedge funds in Q2 2025.
- Ownership among hedge funds grew by 4.8%, making it the largest increase in its category.
- MGM was the only gaming stock in the top three consumer discretionary additions and has maintained high investor confidence.
- Strong future prospects may aid MGM, including potential growth from BetMGM and upcoming upgrades related to Las Vegas events.
- The Empire City Casino’s transition is yet another potential positive factor for MGM’s future.
In conclusion, MGM’s rise in popularity among hedge funds reflects a significant vote of confidence from investors, driven not only by current performance but also by future opportunities in a competitive market.
