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Hedge Funds Are Buying Penn National Gaming, Inc (NASDAQ:PENN)

Is Penn National Gaming, Inc (NASDAQ:PENN) ready to raly soon? The best stock pickers are in a bullish mood. The number of long hedge fund positions improved by 3 recently.

Penn National Gaming (PENN)

At the moment, there are dozens of gauges market participants can use to analyze Mr. Market. Two of the most under-the-radar are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the top hedge fund managers can outpace their index-focused peers by a healthy margin (see just how much).

Just as integral, positive insider trading sentiment is another way to break down the world of equities. There are a variety of stimuli for a corporate insider to downsize shares of his or her company, but only one, very simple reason why they would behave bullishly. Several empirical studies have demonstrated the valuable potential of this tactic if you understand where to look (learn more here).

Keeping this in mind, let’s take a look at the recent action regarding Penn National Gaming, Inc (NASDAQ:PENN).

What does the smart money think about Penn National Gaming, Inc (NASDAQ:PENN)?

In preparation for this year, a total of 28 of the hedge funds we track held long positions in this stock, a change of 12% from the third quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes meaningfully.

Of the funds we track, PAR Capital Management, managed by Paul ReederáandáEdward Shapiro, holds the most valuable position in Penn National Gaming, Inc (NASDAQ:PENN). PAR Capital Management has a $123 million position in the stock, comprising 5.4% of its 13F portfolio. The second largest stake is held by Dmitry Balyasny of Balyasny Asset Management, with a $101 million position; the fund has 2.7% of its 13F portfolio invested in the stock. Remaining hedgies that are bullish include Israel Englander’s Millennium Management, Joe DiMenna’s ZWEIG DIMENNA PARTNERS and Andrew Feldstein and Stephen Siderow’s Blue Mountain Capital.

With a general bullishness amongst the heavyweights, some big names have jumped into Penn National Gaming, Inc (NASDAQ:PENN) headfirst. MD Sass, managed by Martin D. Sass, assembled the most outsized position in Penn National Gaming, Inc (NASDAQ:PENN). MD Sass had 23 million invested in the company at the end of the quarter. John Murphy’s Alydar Capital also made a $10 million investment in the stock during the quarter. The following funds were also among the new PENN investors: Louis Bacon’s Moore Global Investments, and Thomas Lenox Kempner’s Davidson Kempner.

How have insiders been trading Penn National Gaming, Inc (NASDAQ:PENN)?

Bullish insider trading is particularly usable when the primary stock in question has seen transactions within the past 180 days. Over the last six-month time period, Penn National Gaming, Inc (NASDAQ:PENN) has experienced 3 unique insiders purchasing, and 7 insider sales (see the details of insider trades here).

With the results demonstrated by the aforementioned time-tested strategies, everyday investors must always pay attention to hedge fund and insider trading activity, and Penn National Gaming, Inc (NASDAQ:PENN) applies perfectly to this mantra.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.

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