 Welcome to the channel. This is reliable Rudy this video. We're filling a view request for MGM This is my second or third attempt at the video So I have looked at a few of the financials, but in terms of the chart. We are going to try and get to that as well So I haven't done any charting for it, but I look forward to doing that and before we get into the video I'm not a licensed financial advisor everything in this video contains only my opinions for entertainment purposes only I don't have an Individual holding an MGM. I may own it in my index funds. We'll look at that at the end of the video But I'm gonna get my unbiased opinion on the company Okay, going into the metrics 15 billion in market cap roughly revenue almost 12 million profitable company net income 3.25 billion PE disconnecting the PE Disconnect in the profit margins from year to date the five year pretty decent gross margins right there and matching up These profit margins to the price of sales over here pretty solid price of sales So for every dollar and 23 cents you invest this company is going to generate one dollar in revenue And if they are able to sustain these these 20s for profit margins, this price of sales very attractive free cash flow Big disconnect free cash flow the five-year free cash flow same story guys casino stock Hit a little bit by the COVID year of course as you guys can imagine But how did they come out of the COVID year is one of the main concerns with this and you know ultimately It's gonna come down to the debt. They don't pay a dividend Return on assets not the greatest, but they return on equity. I'm sure they were able to benefit greatly from the COVID drop Where they picked up very cheap shares and the price of the stock had ran from 10 up to 50 You know, this is probably where majority of that return on equity is gonna come but going into the future We got a decent downtrend that's building right here, but short-term decent uptrend Where are they buying back their shares is the big question we go over to the eight pillars last five years They bought back 27% of their shares. We'll go to the income statement. Look at that but the big the big thing to monitor with this company is the debt and All in all I came to a conclusion that I need to look at a couple more quarters But we're gonna go break down some of this stuff now long-term liabilities divided by five-year average for cash Well, we've already determined that their five-year numbers are a little bit skewed right here with the COVID year So we're gonna go and look at that but insinuating off their year-to-date free cash flow we're gonna pull up a calculator here and Okay, so we have We got to go to the balance sheet real quick Long-term liabilities total long-term liabilities 35 billion in total long-term liabilities right here. So we Let's go back over here calculator. So Let's do the calculation total long-term liabilities 35 billion divided by five-year average free cash flow We're not doing this five-year average free cash flow. We're gonna take this year-to-date free cash flow Let's just say that they're able to Continue this free cash flow going on to the future. We're going to divide this by 1.39 billion This is insinuating that's gonna take them 25 years of pay off their total long-term liabilities So I may explain why this is a red flag a little a little bit concerning that they are Putting a lot of this free cash flow towards buying back shares Because it could come back to hurt them in the short to medium term for sure a long term It could really pay off for them who knows but we're gonna go over to the income statement We're on four quarters right here You can see the these two years insinuating the COVID drops big declines in revenue right here But now they're starting to get back on track a little bit. We'll go to the quarterly as well but leading up to COVID you can see pretty consistent around this nine bill nine the 10 billion and Especially from 2017 2018 and 2019. This is pretty solid growth right here and matching that up with their cost of goods sold right here The increase in revenue is definitely out doing the cost of goods sold. So that is pretty good Solid revenue growth right there that I would say now switching this over to a quarterly. You can see These years were the big three are the big year in COVID I would say and you can see They are getting some growth in those years consistent growth back up to here But when we go to the net income you can see multiple years of multiple quarters of negative net income right here now Going down to the shares. Let's switch it back to a four quarterly You can see from 2013 issued issued issued issued issued now from 2017. They bought back a good chunk Bought back bought back now they slowed down this they had to get more information for themselves as a company But when I go into a quarter you're you're gonna see that we're gonna focus on that quarter for the COVID drop So here's that really big drop for COVID they started buying back shares and they bought back a good chunk Good chunk and now they bought back an even bigger chunk in the first quarter of 2022 This was 23 million and then they bought back another 25 million so they're really hammering back on buying back shares But when you go look at the stock price, where are they buying back those shares? They're buying back those shares. This is the first quarter Prices up here. Here's the second quarter If they were able to get into these shares down in here, these are really good shares button I'm sure they were probably consistently buying it right here But if this if this price were to give out and the prices to continue on this downtrend I'm going to explain why it could be a big red flag. We're going to go over to the balance sheet um First thing I want to point out total assets 48 billion total liabilities 41 billion So you're above that one to one current ratio from liabilities are from assets to liabilities But I'd like to see it a little bit higher, but as long as it's not under one I'm not as worried about them going under But these long-term liabilities you can see we're on a quarterly basis right here You can see They took out a lot. They took on a lot of debt right here Now if they're focusing on share buybacks and the price keeps going down and they need to take out more debt There's been multiple rate hikes. They're going to be paying higher interest on that debt So if they need to take out more debt to be able to pay off debt That is not going to be a winning formula. So they're really banking on the share price of mgm to In a sense go up now if the price continues to go down it's going to be That that is really playing with fire right there. I'd want to see them You know, maybe focus some of that free cash flow to paying off debt And we can go to the cash flow statement See the amount of debt that they're repaying off. So they increased In this year alone three billion, but they also issued debt You know, it doesn't show it right there that they issued debt, but they definitely had more long-term liabilities right here So it's interesting how that Isn't showing up right there Uh Capital expenditures pretty much right in line, but it is a decent increase right here Free cash flow they're bringing in free cash flow. This is pretty consistent free cash flow right here They're also making acquisitions This is a big increase in acquisitions from quarter one to quarter two I'd want to go look into those those acquisitions. This is probably where that debt Is being taken on for this acquisition So yeah, pretty interesting stuff right there, but as you can see the net income is kind of all over the place And it's it's going to be tough to see I I want to see a couple more quarters before I would Even think about but from a business standpoint cash from operations Like the cash that their business model is bringing in is pretty solid So yeah, we got some positives and some negatives, but in In the end, uh, the debt is just a little bit too out of reach for me to have comfort with it Uh, I pulled up macro trends right here. I haven't really in my other videos. I didn't really get to this But we're the main thing that I'm focused on here's that covid and this is the growth that they've had off of that And I can see the increase is declining. So this is why in a model It's going to be like if I were to plug in numbers for the stock analyzer tool It's going to be hard to figure out numbers Kind of what I was expecting to see and then also with the margins you can see even dating back We have low single digits up to Mid teens back down the low single digits up into the 20s down to negatives And now we're on this just kind of straight upward growth and in uh net margins So it's going to be really hard to judge What type of profit margins you're going to plug in for this company, which is why I'm going to skip over that entirely Moving over to the chart So I have not really done anything charting wise on this yet. So Let's uh start from scratch. We're on a daily chart or a daily Right here for mgm. You can see here's that huge covid run And now we've kind of started this downtrend right here. Now on this first initial drop I'd want to mark this you can see we're kind of pushing up to that price right there access support Now we aren't really reaching up to that to act as resistance But we are kind of breaking through this shorter term downtrend I'd want to see how it acts with this and you can see short term a little bit of an uptrend And a downtrend. This is the wedge. How is it going to act? Which way is it going to choose now if it chooses a downward To crack that support. We have a gap fill right here Gap fill right here. This is why them focusing a lot on repurchasing shares This could really come back to bite them because they bought shares up here When the price, you know, it's kind of insinuating. This has got this bent fishing rod Where you have a fish on the line and it's pulling your rod down. You can see that now I'm going to switch it over to a monthly chart And See if we can set an uptrend so I can see from the From the IPO in 1988. We got these three points of contact right here one two three four now i'm going to Mark this Uptrend and i'm going to get this one final wick right there. I was focused on that I didn't even look to the right of my chart at all I was focused on one two three points of contact and that final wick of contact Now you can see we trade below that we trade below that but over here on a monthly chart We never set a close above that you know I might even adjust that so this final point of contact right here gets on that On the engulfing part of this green candle So you can see this long-term uptrend You can see better how this is more of that bent fishing rod right here where you have your pole And that fish is pulling your your rod tip down You see that so if we are to get rejected off of this Is it going to crack the support and come down and fill some of these gaps you can see We have a few nice bull flags right here. You have a nice a nice pole You're focused on the next three candles one two three you push out that a whole time high price One two three you push that price one two three you push that price and now this uptrend broke Right here right And this is where we kind of set this head and shoulders look right here So i'm going to switch it back to a daily we're going to get rid of that Now what could I see transpire if this were to break this this downtrend that we got which you know That's might that may be asking for a lot, but it is a bull case scenario I'm going to go pull this like it's a Like it's a full one two three four five you can see the one two three four five So now I could be focused on some sort of abc retracement Phase how is it going to act if it can push this downtrend? How is it going to act at this 702 which is about 44 flat? So i'm going to i'm going to close my chart out And we're going to put this fib tool back up through this This is one thing that I could see transpire you have a wave one You have a wave two You have a wave three that cracks through the support comes down fills this gap You see that Now off of this gap fill you're going to have short or swing traders that are trying to swing that gap This is where you back test the bottom of wave one and then you have an ultimate Finish on this five wave structure to the downside now You have a gap right here and you have a gap right here. You have two nice gaps. I need to get filled I'm not going to mark it on the money. I'm just going to put those in And now we're going to go back to a monthly chart now that we have that five wave structure mapped out And we're going to go remap my long-term trend line Three points of contact one two three We're going to pull it right through the bottom of that green engulfing candle You can see how this five wave structure could pan out meaning back down to the long-term trend line These this is where I'd want to see the company focusing on those sharers Honestly, I would have liked to see the company issue more shares up here with the debt levels that they were at They would have benefited greatly from it And then they could have focused more on their debt They could have paid off more debt And they could have focused more on the share buybacks if the price were to get down here That is my take on that But uh all in all It is possible that if it were to get bullish You got to see it take out this all-time high price if this is a retrace phase, you know on a monthly chart We have a nice a double bottom higher low taking place right here. This is a nice green candle on the month I'd want to see it hold this uptrend break the downtrend and truly try to take out this all-time high This short shorter term high price because if it can take out this price, it's going to probably go test some sort of 702 which meets up around 70 That that's my two ways An extension up to here. How is it going to act if it can push through that? You know, it may even test the all-time high price Personally, I think that this price is ultimately going to crack down get down into these fill some of these gaps meet in with the long-term trend line But that is my take on the chart and that is my take on mgm stock Would I be interested in buying it right now? No, I got to see a couple more quarters and that's my take I hope you guys enjoy the video and we'll see you on the next one