5 Best Casino Stocks To Buy Now

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In this article, we discuss 5 best casino stocks to buy now. If you want to read our detailed analysis of these stocks, go directly to 14 Best Casino Stocks To Buy Now

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.”

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