IAC Inc., a major owner of MGM Resorts International (MGM) has been picking up shares with multiple buys in the past week. That includes a 279,800 share buy, for just under $10 million, and another buy for 283,700 shares, also for just under $10 million. Both buys increased the company’s holdings by nearly 1 percent.
That’s the first insider buy at the company since June, when a director picked up 38,000 shares, paying just over $1.1 million.
There have been some smaller insider sales over the same time. Looking back over the past three years, company insiders have been more likely to be sellers than buyers.
Overall, insiders at the company own about 19.5 percent of shares.
The casino operator has seen its shares dive in recent months, on fears about a slowing economy. That’s even as the company has been reporting strong operational numbers, with earnings up 1,600 percent in the past year, and revenue up 48 percent.
Action to take: Casino companies tend to be responsive to perceived changes in the economy. Buying now, while fears of a market slowdown are still ongoing, could pay off well over time. At present, the company only pays a $0.01 dividend, so investors should look elsewhere for income.
For traders, shares have the potential to rebound in the coming months, particularly if inflation slows. The January $40 calls, last going for about $2.00, could deliver mid-to-high double-digit returns in the next few months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.