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MGM Mirage (NYSE:MGM) Draws Investors' Interest - Up Over 10 Percent


Thursday, April 8th, 2010

After being one of the laggards of the industry for some time, MGM Mirage (NYSE:MGM) made a nice move today, ending the session up by over 10 percent.

Other casino stocks ended up as well, with Wynn Resorts (Nasdaq:WYNN) up by almost 6 percent and Las Vegas Sands (NYSE:LVS) up by almost the exact same amount.

Although this has made some openly wonder if this will be the beginning of an upward move in travel stocks, I think that's way too premature to call, and highly unlikely to happen, at least as far as the fundamentals go.

We could obviously see traders temporarily move the prices of travel stocks based on nothing other than the season is approaching when that's the time people travel, but there are far too many questions this spring and summer on the economic front to assume travel stocks are ready to go, even with the big day for MGM.

This may get investors or traders to remember travel stocks, but I personally don't see much hope of things returning to people spending the money they would under normal vacation conditions.

With nothing to speak of to drive up the price of MGM, it seems to be a play on the lower price of the stock and the upcoming travel season. Neither of these are good reasons to invest in any company, but in the short term it could bring results for traders, but not necessarily a good play for long-term investors.

As for travels stocks, there could be some winners this summer, but most people are going to stay close to home again, and it would pay to look for companies with a number of businesses and outlets close to high population areas where the locals can still access the entertainment and fun without the need to travel. That seems more of a surety than counting on businesses that require heavy travel to do good business.



Article by Gary B

The views expressed are the subjective opinion of the article's author and not of FinancialAdvisory.com



Tags: las vegas sands , mgm , travel stocks , wynn resorts