MGM Mirage
But I'm not going to waste time running down the specifics of the results (aka "the losses"). You can get the numbers for yourself directly from MGM's press release. Make sure to come back, though, because I'm going to tackle an important question: In light of these results, is MGM worth considering as an investment?
In the past, I've been critical of the company because of the state of its balance sheet, which carried more than $12 billion in debt at the end of the quarter. However, I believe recent moves that the company has made have drastically cut the probability that it will end up declaring bankruptcy.
This leaves us with a company that is potentially priced well below what its assets are really worth. For Sands and Wynn fans, I think they're attractive for different reasons, but neither can boast a cheaper valuation than MGM.
This isn't to understate the potential risks here. For the June-ended quarter, MGM's EBITDA covered interest expense a mere 1.5 times. That's still scary. And with the bankruptcy filing of Station Casinos less than a week ago, we were reminded just how serious debt problems can get. But while that big downside remains, I think the potential has dropped.
So if you're in the market for a gaming stock, at this point I'd skip the smaller players like Boyd
More Foolish gaming coverage:
- Are Casino Stocks Actually Cheap?
- The Belt Is Tightening at Las Vegas Sands
- Wynn's Second Quarter: Cloudy, Chance of Sun
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