AMTD Digital and 4 Other Stocks Redditors are Buying in August

3. Penn National Gaming, Inc. (NASDAQ:PENN)

Number of Hedge Fund Holders: 36

Penn National Gaming, Inc. (NASDAQ:PENN) is a Pennsylvania-based company that specializes in integrated entertainment, sports content, and casino gaming in North America. Penn National Gaming, Inc. (NASDAQ:PENN) became an overvalued ‘internet meme’ in October 2020, and Redditors have started buying up the shares once again. In Q2 2022, Penn National Gaming, Inc. (NASDAQ:PENN) missed its EPS consensus by $0.35, and the revenue of $1.62 billion jumped 4.5% year over year and exceeded market consensus by $20 million. For its 2022 guidance, the revenue and adjusted EBITDA guidance ranged from $6.15 billion to 6.55 billion and $1.875 billion to $2.0 billion, respectively.

On July 20, Truist analyst Barry Jonas reiterated a Buy rating on Penn National Gaming, Inc. (NASDAQ:PENN) but lowered the price target on the shares to $48 from $60 as part of a broader research note on Q2 results in the Gaming sector. While the most recent quarter should be “fine”, the outlook seems “less certain”, and maintaining a more conservative view is wise, the analyst told investors.

According to Insider Monkey’s Q1 data, 36 hedge funds were bullish on Penn National Gaming, Inc. (NASDAQ:PENN), with combined stakes worth $405 million. Jim Simons’ Renaissance Technologies held the biggest position in the company, comprising 1.78 million shares valued at $76 million. 

Here is what Baron Focused Growth Fund has to say about Penn National Gaming, Inc. (NASDAQ:PENN) in its Q1 2022 investor letter:

“Penn declined 18.2% in the quarter and penalized performance by 54 basis points. This was due to investor concerns over continuing losses from its Barstool business. We believe the $50 million of losses this year from its digital business is modest in relation to Penn’s $1 billion of brick and mortar 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 digital losses.”