MGM被低估，拥有强劲的现金流和股票回购；MGM日本项目可能提供相当于其当前市值的重大长期上行空间。

Those four stocks are Adobe, MGM Resorts, Dick Sporting Goods, and Lyft.

Another company that falls into that value territory is MGM Resorts. This is one of the stocks that I hold in the Ace Metro portfolio because ton of potential to buy back stock and I'll get to their MGM Japan building that which they're building right now that's going to open in 2030. That could be one of the most profitable buildings in the world when that does open up.

out now price to earnings multiple not necessarily as low as you see with a company like Adobe at about 25 but look at the price to free cash flow this is about seven the reason for the difference between those two things is price to earnings is going to include depreciation costs price to free cash flow is not going to include that same depreciation cost you so you have casinos that were built 10 20 30 years ago that you're still depreciating a lot of those expenses but that's not coming out of your cash so price to free cash flow is going to be a little bit better judge of how the valuation of MGM Resorts is looking

so about seven on a trailing basis, 7.1 on a forward basis. So, not a lot of changes that investors are expecting right now. And in some ways, it is. Las Vegas is always a little bit cyclical, but this right here is the trailing 12-month revenue for the Las Vegas Strip Resorts in gold. And then in blue is regional properties for MGM Resorts. And you can see that things peaked a little over a year ago.

But now we're going to add in MGM China revenue. This is the subsidiary. They own a little bit over 50% of the subsidiary. So there's basically a dividend that comes back from that publicly traded company that has actually been growing really nicely and has offset some of the some of the losses that we've seen in the US.

But the other thing that I want to look at is if you look at the annual numbers and we go all the way back to 2015, you can see that each one of these regions is doing much better than it was pre-pandemic. Obviously a bad year in 2020 and even in 2021, but by the time you get to 2022, you're well above where you had revenue in 2023. And remember, Macau was almost nothing at that point. So most of this is coming from Las Vegas. You get to over $8 billion worth of revenue and they have been able to maintain that.

So this is just a cash flow machine. This is like buying an ATM in the Las Vegas desert. And then what they're ultimately doing with that cash is buying back a ton of their stock. The compound annual growth rate for the number of shares outstanding is negative 8.3%. This goes all the way back to 2017. If we just look since 2021, you can see that goes down to doubledigit reduction in the number of shares outstanding on an annualized basis.

This is slowed just a little bit. And the reason for that is MGM is building MGM Japan in Osaka. This is going to be the only major integrated resort with a casino in Japan. Could be the one of the most profitable buildings in the world. This is about a $10 billion project. They own about 44% of the economics of the project. This is several billion dollars of investment of that MGM is making, has made, and is going to make over the next couple of years.

But when it's open, this property alone could be the most profitable casino in the world. Just how profitable could it be? Well, the best proxy, I've been using this for a couple years now, but management has been starting to talk about this as well, is Las Vegas Sands Marina Bay Sands in Singapore. Singapore is actually a much smaller country than Japan. Japan is a much more wealthy country and potentially a lot more gambling going on in Japan. But Marina Bay Sands generated over $3 billion in adjusted Ibata. This is a proxy for the free cash flow coming from a property over the past 12 months.

If MGM Japan can generate two to3 billion dollars worth of cash flow, that will be a phenomenal cash machine for MGM Resorts. A phenomenal return on investment.

And like I said, even without that, they've been able to buy back 10 to 15% of their shares outstanding on an annualized basis. Only a $10 billion market cap as I'm recording today. This enterprise value number actually includes obligations that they have for leases. So, the debt is not nearly this ownorous.

I think this is one of these companies that is trading for a very very low multiple great cash flow coming from the business. At worst, management is just going to buy back shares at this extremely low price. But long-term, if you're a long-term investor, you're going to be able to get that upside with the MGM Japan Resort. Eventually, in the next couple of years, the market is going to start to think about just how big that opportunity is. That opportunity alone could be worth MGM's entire market cap. I think this is a sleeping giant for investors who are able to buy in at this low price and just ride the wave over the next few years.