In this article, we discuss 14 best casino stocks to buy now.
The 2020 pandemic has forced casino companies across the world to rethink their business models. The resulting changes, that include a shift towards better digital offerings and leaner cost structures, have combined with a tight supply environment at the market to make casino stocks better bets to ride out the present economic downturn than previously thought. According to a report by investment advisory Macquarie Research, a strong pent-up demand for work travel and conferences is also boosting casino stocks.
Some of the best casino stocks in this context according to hedge funds include Caesars Entertainment, Inc. (NASDAQ:CZR), MGM Resorts International (NYSE:MGM), and Las Vegas Sands Corp. (NYSE:LVS). However, a soft leisure environment presents a looming challenge for these firms as they navigate the market volatility generally associated with macro slowdowns. Per Analyst Chad Beynon at Macquarie Research, gross gaming revenue and margins will bring attention to casino stocks in the next few months.
Beynon is also of the opinion that the changes to the business models of some of the best casino stocks in the past few years indicate that non-gaming revenue can also spring earnings surprises. As Vegas occupancy rates climb over 90% after months, sports betting skyrockets amid the start of the NFL and the football World Cup, and travel demand picks up again as the market emerges from an inflation selloff, shrewd investors can jump on the casino firms that seem undervalued in the emerging macro environment.
Our Methodology
The companies that operate in the casino sector were selected for the list through a careful assessment of business fundamentals and analyst ratings to provide readers with some context for their investment choices. Hedge fund sentiment was included as a classifier as well. The hedge fund sentiment around each stock was calculated using the data of around 900 hedge funds tracked by Insider Monkey in the second quarter of 2022.
Best Casino Stocks To Buy Now
14. Full House Resorts, Inc. (NASDAQ:FLL)
Number of Hedge Fund Holders: 15
Full House Resorts, Inc. (NASDAQ:FLL) owns, develops, invests in, operates, manages, and leases casinos and related hospitality and entertainment facilities. The firm features on the list of best casino stocks to invest in. One of the premier properties of the firm is the Silver Slipper Casino and Hotel in Mississippi. This facility has 757 slot machines and 24 table games, a surface parking lot, 129 hotel rooms, an on-site sportsbook, a fine-dining restaurant, a buffet, and a quick-service restaurant, as well as an oyster bar and a casino bar.
At the end of the second quarter of 2022, 15 hedge funds in the database of Insider Monkey held stakes worth $30 million in Full House Resorts, Inc. (NASDAQ:FLL), compared to 17 the preceding quarter worth $62.7 million.
Just like Caesars Entertainment, Inc. (NASDAQ:CZR), MGM Resorts International (NYSE:MGM), and Las Vegas Sands Corp. (NYSE:LVS), Full House Resorts, Inc. (NASDAQ:FLL) is one of the best casino stocks to invest in according to hedge funds.
13. Century Casinos, Inc. (NASDAQ:CNTY)
Number of Hedge Fund Holders: 15
Century Casinos, Inc. (NASDAQ:CNTY) operates as a casino entertainment company in the United States, Canada, and Poland. On August 5, the firm posted earnings for the second quarter of 2022, reporting earnings per share of $0.28, beating estimates by $0.07. The revenue over the period was $111 million, up over 20% compared to the revenue over the same period last year. The company is based in Colorado and was founded in 1992.
On July 26, JMP Securities analyst Jordan Bender initiated coverage of Century Casinos, Inc. (NASDAQ:CNTY) stock with an Outperform rating and a $15 price target, noting that the firm was trading at a 38% discount to regional gaming peers.
Among the hedge funds being tracked by Insider Monkey, New Jersey-based investment firm Royce Associates is a leading shareholder in Century Casinos, Inc. (NASDAQ:CNTY), with 2.6 million shares worth more than $18.7 million.
12. Melco Resorts & Entertainment Limited (NASDAQ:MLCO)
Number of Hedge Fund Holders: 24
Melco Resorts & Entertainment Limited (NASDAQ:MLCO) develops, owns, and operates casino gaming and resort facilities in Asia and Europe. The company is one of the most prominent casino stocks to invest in. One of the premier casino properties of the firm is called the City of Dreams, an integrated casino resort that has approximately 511 gaming tables and 572 gaming machines, approximately 770 rooms, suites, and villas, about 25 restaurants and bars, 165 retail outlets, and health and fitness clubs.
On September 26, investment advisory Citi maintained a Buy rating on Melco Resorts & Entertainment Limited (NASDAQ:MLCO) stock and raised the price target to $11.50 from $11. Analyst George Choi issued the ratings update.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Eminence Capital is a leading shareholder in Melco Resorts & Entertainment Limited (NASDAQ:MLCO), with 11.6 million shares worth more than $66.5 million.
11. Churchill Downs Incorporated (NASDAQ:CHDN)
Number of Hedge Fund Holders: 25
Churchill Downs Incorporated (NASDAQ:CHDN) operates as a racing, online wagering, and gaming entertainment company in the US. On August 12, the company announced that it had agreed to sell 49% of United Tott, a wholly-owned subsidiary, to NYRA Content Management Solutions, a subsidiary of the New York Racing Association. NYRA is a not-for-profit corporation that operates the three largest Thoroughbred horse racing tracks in New York. The transaction in this regard is expected to close by the end of 2022.
At the end of the second quarter of 2022, 25 hedge funds in the database of Insider Monkey held stakes worth $423 million in Churchill Downs Incorporated (NASDAQ:CHDN), compared to 28 in the preceding quarter worth $454.6 million.
10. Wynn Resorts, Limited (NASDAQ:WYNN)
Number of Hedge Fund Holders: 26
Wynn Resorts, Limited (NASDAQ:WYNN) designs, develops, and operates integrated resorts. The firm is among the best casino stocks to invest in. The stock has jumped in the past few weeks on the back of reports that regulators in China would soon allow e-visas for mainland travelers and tour groups. Per data from the region, mainland gamblers make up about 90% of spending at Macau casinos, with VIP guests accounting for nearly 70%. The figures highlight the importance of easier entry for tourists.
On September 26, Jefferies analyst David Katz upgraded Wynn Resorts, Limited (NASDAQ:WYNN) stock to Buy from Hold with a price target of $75, up from $62, appreciating the resumption of Macau-bound e-Visas in late October and early November.
At the end of the second quarter of 2022, 26 hedge funds in the database of Insider Monkey held stakes worth $142.8 million in Wynn Resorts, Limited (NASDAQ:WYNN), compared to 32 in the previous quarter worth $269 million.
In its Q3 2021 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Wynn Resorts, Limited (NASDAQ:WYNN) was one of them. Here is what the fund said:
“In the most recent quarter, we exited the Fund’s holdings in Wynn Resorts, Limited (NASDAQ:WYNN) due to: (i) ongoing COVID-19-related travel restrictions in China, Macau, and Singapore; and (ii) the Macau government’s announcement to tighten its casino regulatory oversight.”
9. Everi Holdings Inc. (NYSE:EVRI)
Number of Hedge Fund Holders: 26
Everi Holdings Inc. (NYSE:EVRI) provides entertainment and technology solutions for the casino and digital gaming industries. The company is based in Las Vegas and was founded in 1998. It has a market capitalization of more than $1.4 billion. The firm is among a handful of casino firms that also have a thriving fintech business. Everi Holdings Inc. (NYSE:EVRI) was formerly known as Global Cash Access Holdings, Inc. but changed the name to Everi Holdings Inc. in August 2015. It recently beat market expectations on revenue for the second quarter of 2022.
On August 1, Stifel analyst Jeffrey Stantial maintained a Buy rating on Everi Holdings (NASDAQ:EVRI) stock and lowered the price target to $24 from $30, backing gaming firms to show impressive recovery post-Omicron.
Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Driehaus Capital is a leading shareholder in Everi Holdings Inc. (NYSE:EVRI), with 2.26 million shares worth more than $39.9 million.
In its Q2 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Everi Holdings Inc. (NYSE:EVRI) was one of them. Here is what the fund said:
“Our Strategy outperformed with strong results from consumer discretionary stocks like Everi Holdings. Everi Holdings Inc. (NYSE:EVRI) is a provider of casino games, cash access and customer relationship technologies to the gaming industry that outperformed, as gaming activity and growth in placement of new games generated strong financial results.”
8. VICI Properties Inc. (NYSE:VICI)
Number of Hedge Fund Holders: 26
VICI Properties Inc. (NYSE:VICI) is an experiential real estate investment trust that owns one of the largest portfolios of market-leading gaming, hospitality, and entertainment destinations. The firm is among the best casino stocks to invest in. The firm is slowly building a dividend profile. Over the past three years, it has consistently paid a growing dividend to shareholders. On September 8, VICI Properties Inc. (NYSE:VICI) declared a quarterly dividend of $0.39 per share, in line with previous. The forward yield was 4.67%.
On August 24, JMP Securities analyst Mitch Germain initiated coverage of VICI Properties Inc. (NASDAQ:VICI) stock with an Outperform rating and a $38 price target, noting that the strategy of the firm had been stress tested as rents were fully collected during the pandemic.
Among the hedge funds being tracked by Insider Monkey, Florida-based investment firm Pentawater Capital Management is a leading shareholder in VICI Properties Inc. (NYSE:VICI), with 4.5 million shares worth more than $135 million.
In its Q2 2022 investor letter, Meridian Funds, an asset management firm, highlighted a few stocks and VICI Properties Inc. (NYSE:VICI) was one of them. Here is what the fund said:
“VICI Properties Inc. (NYSE:VICI) is a real estate investment trust company specializing in casinos and other entertainment properties. We invested in VICI in 2018 when earnings were declining due to dilutive acquisitions. Our thesis was that, as investors grew more comfortable with casinos as a REIT subsector, the value of their properties would increase. We also liked the defensive characteristics of the company, specifically the triple-net lease structure, which dictates that lessees pay all maintenance and capital expenditures, and the history of casino REITs with zero rent payments missed by casinos during either the global financial crisis or the 2020 pandemic. Furthermore, we were confident that VICI’s growth prospects would increase as more casinos monetized land holdings with VICI’s ability to use its extensive cash and liquidity to make acquisitions. VICI’s stock outperformed in the quarter due to its appeal as a fairly defensive investment and the news that it would be included in the S&P 500 Index. We maintained our position in VICI.”
7. DraftKings Inc. (NASDAQ:DKNG)
Number of Hedge Fund Holders: 27
DraftKings Inc. (NASDAQ:DKNG) operates a digital sports entertainment and gaming company. In late August, the firm announced that it would be launching an online sportsbook in Kansas. As part of the launch, DraftKings Inc. (NASDAQ:DKNG) will offer customers to place legal and regulated bets across sporting events. This is the 18th state in which the firm is offering this sportsbook. The latest guidance numbers of the firm, released in early August, do not include the contributions from the launch in Kansas.
On June 28, Guggenheim analyst Curry Baker maintained a Buy rating on DraftKings Inc. (NASDAQ:DKNG) stock and raised the price target to $34 from $31, appreciating the ongoing focus on cost controls and a more rational promotional environment.
At the end of the second quarter of 2022, 27 hedge funds in the database of Insider Monkey held stakes worth $682 million in DraftKings Inc. (NASDAQ:DKNG), compared to 27 the preceding quarter worth $1.1 billion.
In its Q4 2021 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and DraftKings Inc. (NASDAQ:DKNG) was one of them. Here is what the fund said:
“Shares of DraftKings Inc. (NASDAQ:DKNG) fell in the quarter, as stocks of online gaming companies were under pressure. Sports betting and i-gaming are rolling out with great fanfare and success across the country; however, investors seem concerned about competition and margins. Most participants are spending heavily on marketing and promotions, which is cutting into margins. We see this as worthy investment in customer acquisition at a moment in time when revenues are just building. We continue to believe that online sports betting and gaming will be enormous industries, that DraftKings will be a leading player. We think the business will have high margins as it matures. We believe we are underwriting the business conservatively and see much upside in the long term.”
6. Bally’s Corporation (NYSE:BALY)
Number of Hedge Fund Holders: 27
Bally’s Corporation (NYSE:BALY) is a gaming, hospitality, and entertainment company that owns and operates casinos, resorts, and online gaming businesses. It is one of the top casino stocks to invest in. In late August, the firm announced that it would be partnering with Genius Sports to gain access to a portfolio of exclusive official data rights comprising big sporting events like the English Premier League, NASCAR, CFL, Liga MX, Argentine and Colombian soccer, and the NFL.
On June 28, JMP Securities analyst Jordan Bender initiated coverage of Bally’s Corporation (NYSE:BALY) stock with a Market Perform rating and no price target, highlighting that the shares were fairly valued considering uncertainties around regulatory changes in the UK.
At the end of the second quarter of 2022, 27 hedge funds in the database of Insider Monkey held stakes worth $150.7 million in Bally’s Corporation (NYSE:BALY), compared to 24 in the preceding quarter worth $291 million.
Along with Caesars Entertainment, Inc. (NASDAQ:CZR), MGM Resorts International (NYSE:MGM), and Las Vegas Sands Corp. (NYSE:LVS), Bally’s Corporation (NYSE:BALY) is one of the best casino stocks to invest in according to hedge funds.
5. Penn Entertainment, Inc. (NASDAQ:PENN)
Number of Hedge Fund Holders: 33
Penn Entertainment, Inc. (NASDAQ:PENN) provides integrated entertainment, sports content, and casino gaming experiences. It is one of the top casino stocks to invest in. In mid-August, the firm revealed in a regulatory filing that it had exercised CALL rights to bring its ownership in Barstool Sports to 100%. The formal takeover of the company is expected to be complete by early next year. In January 2020, the firm had invested $163 million for a 36% share in the sporting firm.
On August 5, Barclays analyst Brandt Montour maintained an Overweight rating on Penn Entertainment, Inc. (NASDAQ:PENN) stock and raised the price target to $44 from $37, appreciating the solid second quarter earnings of the firm.
Among the hedge funds being tracked by Insider Monkey, Washington-based firm HG Vora Capital Management is a leading shareholder in Penn Entertainment, Inc. (NASDAQ:PENN), with 3.5 million shares worth more than $106.5 million.
In its Q2 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Penn Entertainment, Inc. (NASDAQ:PENN) was one of them. Here is what the fund said:
“PENN Entertainment, Inc. (NASDAQ:PENN) declined 28.3% in the quarter and penalized performance by 71 bps. This was due to investor concerns that a potential recession would result in a slowdown or decline in growth. The company has seen no material change to its visitation or spending levels, and its earnings remain strong. Penn is generating strong cash flow to more than offset investments in its digital growth opportunity. It is using excess cash to buy back its stock. Penn is well positioned to weather a slowdown or recession and, if one does occur, the company should still generate revenue and EBITDA above pre-pandemic levels.
Management continues to use its excess cash for share repurchases and debt reduction as well as continuing investments in its digital businesses. We think the $50 million of losses this year from its digital business is modest in relation to Penn’s $1 billion of casino EBITDA. The losses from its digital business represent customer acquisition costs incurred as additional states legalize online gambling. Since it is far less expensive to retain existing customers than to acquire new ones, we expect marketing costs to decline as Penn builds its customer base.
Penn’s core bricks and mortar casino business remains strong, and the company has a healthy regional casino business and a strong balance sheet to fund its digital losses.”
4. Boyd Gaming Corporation (NYSE:BYD)
Number of Hedge Fund Holders: 35
Boyd Gaming Corporation (NYSE:BYD), together with its subsidiaries, operates as a multi-jurisdictional gaming company. The firm features on the list of best casino stocks to invest in. On July 26, the firm posted earnings for the second quarter of 2022, reporting earnings per share of $1.48, beating estimates by $0.09. The revenue over the period was $894 million, up over 0.1% compared to the revenue over the same period last year. The company is based in Las Vegas and was founded in 1975.
On September 23, investment advisory JMP Securities initiated coverage of Boyd Gaming Corporation (NASDAQ:BYD) stock with an Outperform rating and a $65 price target. Analyst Jordan Bender issued the ratings update.
At the end of the second quarter of 2022, 35 hedge funds in the database of Insider Monkey held stakes worth $898 million in Boyd Gaming Corporation (NYSE:BYD), compared to 40 in the previous quarter worth $1 billion.
In its Q2 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Boyd Gaming Corporation (NYSE:BYD) was one of them. Here is what the fund said:
“Boyd Gaming Corporation (NYSE:BYD) is one of the largest and most successful casino entertainment companies in the U.S. The company owns and operates 28 casino gaming properties in 10 states with a large presence in Las Vegas. Business conditions have been strong, yet the shares are valued at only 6 times 2022 estimated cash flow versus a long-term average of more than 9 times cash flow. The company maintains a strong and liquid balance sheet. Insiders own approximately 27% of the company. We believe Boyd is a compelling acquisition target.”
3. Las Vegas Sands Corp. (NYSE:LVS)
Number of Hedge Fund Holders: 42
Las Vegas Sands Corp. (NYSE:LVS), together with its subsidiaries, develops, owns, and operates integrated resorts in Asia and the United States. The company is one of the most prominent casino stocks to invest in. Some of the famous properties it owns include The Venetian Macao Resort Hotel, the Londoner Macao, The Parisian Macao, The Plaza Macao, Four Seasons Hotel Macao, Cotai Strip, and the Sands Macao, as well as the Marina Bay Sands in Singapore.
On September 26, investment advisory Jefferies upgraded Las Vegas Sands Corps. (NASDAQ:LVS) stock to Buy from Hold with a price target of $50, up from $40. Analyst David Katz issued the ratings update.
Among the hedge funds being tracked by Insider Monkey, Chicago-based firm Citadel Investment Group is a leading shareholder in Las Vegas Sands Corp. (NYSE:LVS), with 4.1 million shares worth more than $138.6 million.
In its Q2 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Las Vegas Sands Corp. (NYSE:LVS) was one of them. Here is what the fund said:
“Certain travel-related businesses remain cyclically depressed not secularly challenged and should rebound as economic strength re-emerges. For example, the business operations of Macau-centric casino and gaming companies such as Las Vegas Sands Corporation (NYSE:LVS) have yet to recover due to the ongoing COVID-19 challenges in China. We expect business to rebound sharply when economic growth recovers just as it did in Las Vegas. Las Vegas Sands Corporationis a global leader in the development and operation of luxury casino resorts in Macau and Singapore, and it maintains a liquid and investment grade balance sheet. It is currently valued at a significant discount to our assessment of replacement cost, and the company’s Macau operations are valued at only 7 times estimated cash flow.”
2. MGM Resorts International (NYSE:MGM)
Number of Hedge Fund Holders: 46
MGM Resorts International (NYSE:MGM), through its subsidiaries, owns and operates casino, hotel, and entertainment resorts in the United States and Macau. The firm is among the best casino stocks to invest in. In late September, the company revealed that it had entered into a strategic partnership with ExteNet Systems, a leading national provider of converged communications infrastructure, to design, build, and operate advanced in-building signal and connectivity solutions.
On September 26, Citi analyst George Choi maintained a Buy rating on MGM Resorts International (NASDAQ:MGM) stock and raised the price target to $58.50 from $58, citing the resumption of Macau-bound e-Visas in late October and early November as a positive surprise.
At the end of the second quarter of 2022, 46 hedge funds in the database of Insider Monkey held stakes worth $1.1 billion in MGM Resorts International (NYSE:MGM), compared to 59 in the preceding quarter worth $2.18 billion.
In its Q2 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and MGM Resorts International (NYSE:MGM) was one of them. Here is what the fund said:
“MGM Resorts International (NYSE:MGM) is a leading global casino and entertainment company. At its recent price of only $30 per share, we believe MGM is valued at a significant discount to our reasonable $50 per share estimate of the sum-of-the-parts value of its business. Further, the company’s domestic operations are valued at a 18% free-cash-flow yield. Paul Salem, Chairman of the Board, recently acquired shares.”
1. Caesars Entertainment, Inc. (NASDAQ:CZR)
Number of Hedge Fund Holders: 59
Caesars Entertainment, Inc. (NASDAQ:CZR) operates as a gaming and hospitality company in the United States. It is one of the top casino stocks to invest in. In early September, the company announced that the sport wagering mobile app of the firm was now available for use in Kansas. The Caesars Sportsbook is now available in 26 states and North American jurisdictions. 19 of those sports betting locations are mobile. The company claims it operates the most retail sportsbooks across the US.
On August 3, B Riley analyst David Bain maintained a Buy rating on Caesars Entertainment, Inc. (NASDAQ:CZR) stock and lowered the price target to $102 from $128, noting that the stock seemed woefully undervalued.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm HG Vora Capital Management is a leading shareholder Caesars Entertainment, Inc. (NASDAQ:CZR), with 5 million shares worth more than $191.5 million.
In its Q4 2021 investor letter, Carillon Tower Advisers, an asset management firm, highlighted a few stocks and Caesars Entertainment, Inc. (NASDAQ:CZR) was one of them. Here is what the fund said:
“Caesars Entertainment, Inc. (NASDAQ:CZR), a diversified casino-entertainment and resort company, underperformed in the period as its quarterly earnings update was viewed as disappointing by investors. The firm highlighted a number of one-time headwinds that ultimately weighed on margins, as well as some negative impacts brought on by the surge in COVID cases. Despite this, we believe that the sizeable overall margin improvements Caesars has realized coming out of the pandemic will ultimately prove sustainable in the long run.”
You can also take a peek at 15 Best Gambling Stocks To Buy Now and 10 High Dividend Stocks Picked by Billionaire Gabelli.
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Disclosure. None. 14 Best Casino Stocks To Buy Now is originally published on Insider Monkey.
