MGM Holdings

Mike Winston of Winston Capital Partners: Long MGM Holdings

Mike Winston of Winston Capital Partners, InvestPitch presentation produced by sumzero and Institutional Investor on the long case for MGM Holdings Inc (OTCMKTS:MGMB).

Also see: Haruki Toyama of Marcus Asset Management: Long TGS Nopec

MGM Holdings

Buy MGM Holdings Inc (OTCMKTS:MGMB) (http://www.mgmb.com/) because the stock has 33 points of upside (+53%) and 10 points of downside (16%), a reward/risk ratio of better than three to one. MGMb (Metro Goldwin Mayer) is a so-called mini-major movie studio that produces a handful of films each year and maintains no physical production facilities. The company also makes TV projects, owns the MGM cable network, and a 19% interest in the EPIX cable network. In addition, MGMb owns a content library that includes 4,100 movies and 10,000 TV episodes. The content library, TV production and EPIX each add stability to lumpy profits from the movie business. The studio was formed in 1924 and releases film and television content under Metro-Goldwyn-Mayer, United Artists and Orion Pictures. MGM owns the James Bond franchise, and maintains a 50/50 partnership with Sony Corporation (NYSE:SNE) (TYO:6758) on The Hobbit trilogy. MGMb also partnered (75/25) with Sony, on a limited basis, to co-produce Skyfall as well as the next James Bond film due 2015.

In July 2012, MGM Holdings Inc (OTCMKTS:MGMB) filed a private S-1 under the Jobs Act. No word yet on the timing of an IPO, but on 9/13/13, management adopted a poison pill and announced a $75mm buyback. Each quarter the company posts recent financials to its web site and hosts a conference call; in the past few weeks they have started to provide historical financial information.

Background

Kirk Kerkorian has bought and sold the studio numerous times over the past thirty years. The company filed and then emerged from a pre-packaged bankruptcy in 2010. The 2010 reorganization followed Kerkorian’s 2004 sale of MGMb for $5bn to an LBO consortium backed by Sony, Comcast, TPG and Providence Equity Partners. While the company was in Chapter 11, Carl Icahn made two separate (rebuffed) offers to buy up MGMb debt in order to merge with LionsGate. Icahn was also a major shareholder of MGMb until around the time of the S-1 filing, when he sold his stake back to the company for $590mm.

H/T Curry Goat

Mike Winston of Winston Capital Partners: Long MGM Holdings

LEAVE A COMMENT


X
Saved Articles
X
TextTExtLInkTextTExtLInk

The Life and Career of Charlie Munger

Charlie is more than just Warren Buffett’s friend and Berkshire Hathaway’s Vice Chairman – Buffett has actually credited him with redefining how he looks at investing. Now you can learn from Charlie firsthand via this incredible ebook and over a dozen other famous investor studies by signing up below:

  • Learn from the best and forever change your investing perspective
  • One incredible tidbit of knowledge after another in the page-turning masterpiece of a book
  • Discover the secrets to Charlie’s success and how to apply it to your investing
Never Miss A Story!
Subscribe to ValueWalk Newsletter. We respect your privacy.

Are you an intelligent investor?

ValueWalkPremium is a website and newsletter for smart investors like yourself. We focus on the latest hedge fund industry news much of which is not in the public domain and obtained via our sources.

We also have 10 years of resources on how to use this information to better your investment process.

Sign up for  today for only a few dollars a day and get a 3 day no obligation trial with a targeted 20% discount coupon code.

Cancel anytime during trial and you are never charged.

Limited time offer: For first 50 subscribers

0