Do Hedge Funds Love Caesars Entertainment Inc. (CZR)?

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 867 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. In this article we look at what those investors think of Caesars Entertainment Inc. (NASDAQ:CZR).

Caesars Entertainment Inc. (NASDAQ:CZR) investors should be aware of a decrease in enthusiasm from smart money of late. Caesars Entertainment Inc. (NASDAQ:CZR) was in 64 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 76. Our calculations also showed that CZR isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Now we’re going to take a gander at the fresh hedge fund action regarding Caesars Entertainment Inc. (NASDAQ:CZR).

Do Hedge Funds Think CZR Is A Good Stock To Buy Now?

Heading into the fourth quarter of 2021, a total of 64 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -12% from the second quarter of 2021. The graph below displays the number of hedge funds with bullish position in CZR over the last 25 quarters. With the smart money’s sentiment swirling, there exists a few noteworthy hedge fund managers who were upping their holdings considerably (or already accumulated large positions).

Among these funds, Samlyn Capital held the most valuable stake in Caesars Entertainment Inc. (NASDAQ:CZR), which was worth $226 million at the end of the third quarter. On the second spot was Park West Asset Management which amassed $219.9 million worth of shares. Jericho Capital Asset Management, XN Exponent Advisors, and Gates Capital Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Lafitte Capital Management allocated the biggest weight to Caesars Entertainment Inc. (NASDAQ:CZR), around 35.48% of its 13F portfolio. 1060 Capital Management is also relatively very bullish on the stock, setting aside 17.63 percent of its 13F equity portfolio to CZR.

Seeing as Caesars Entertainment Inc. (NASDAQ:CZR) has faced bearish sentiment from the aggregate hedge fund industry, logic holds that there exists a select few hedge funds that elected to cut their entire stakes heading into Q4. Interestingly, Glen Kacher’s Light Street Capital cut the largest stake of all the hedgies followed by Insider Monkey, valued at an estimated $22.8 million in stock. Brandon Haley’s fund, Holocene Advisors, also cut its stock, about $22.4 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest fell by 9 funds heading into Q4.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Caesars Entertainment Inc. (NASDAQ:CZR) but similarly valued. These stocks are Credit Suisse Group AG (NYSE:CS), Rogers Communications Inc. (NYSE:RCI), Splunk Inc (NASDAQ:SPLK), Tractor Supply Company (NASDAQ:TSCO), Fox Corporation (NASDAQ:FOXA), DISH Network Corp. (NASDAQ:DISH), and Verisign, Inc. (NASDAQ:VRSN). This group of stocks’ market valuations are similar to CZR’s market valuation.

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As you can see these stocks had an average of 32.6 hedge funds with bullish positions and the average amount invested in these stocks was $1624 million. That figure was $1883 million in CZR’s case. DISH Network Corp. (NASDAQ:DISH) is the most popular stock in this table. On the other hand Credit Suisse Group AG (NYSE:CS) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Caesars Entertainment Inc. (NASDAQ:CZR) is more popular among hedge funds. Our overall hedge fund sentiment score for CZR is 71.3. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. Unfortunately CZR wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on CZR were disappointed as the stock returned -19.8% since the end of the third quarter (through 11/30) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.