3 Stock Picks: MGM, AVP, KFT

Shares of MGM Mirage (MGM) rose sharply after it sold off a casino and struck deals to insure a major project would get built even if the company goes bankrupt. However, its key markets remain in dismal shape.

The gaming and resort operator, whose major shareholder is billionaire Kirk Kerkorian, would have reported a quarterly loss if not for the sale of its Treasure Island casino. That deal put its first-quarter earnings at 38 cents a share, down from earnings of 40 cents a share a year ago. Analysts expected an average loss of seven cents a share.

Meanwhile, gambling in Las Vegas continues to deteriorate. CEO Jim Murren said on a Monday evening conference call that MGM's key market remained weak. "In the first quarter, it was clearly challenging for all Las Vegas operators,” he said.

In addition to the asset sale, last week MGM announced it had secured financing arrangements with its partner Dubai World and other lenders to assure that its marquee $8.5 billion CityCenter project would go forward regardless of whether the company reorganizes in bankruptcy. (There have been calls to file bankruptcy from major investors such as Carl Icahn and private-equity fund Oaktree Capital Management.)

Keep Reading - Click Here

SOURCE: http://www.smartmoney.com/Investing/Short-Term-Investing/Stock-Picks-MGM...