Is Boyd Gaming Corp. (BYD) A Smart Long-Term Buy?

Baron Funds, an asset management firm, published its “Baron Discovery Fund” fourth quarter 2021 investor letter – a copy of which can be downloaded here. A quarterly return of 3.13% was delivered by the fund’s institutional shares for the fourth quarter of 2021, which was better than the Russell 2000 Growth Index’s 0.01% return, but below the S&P 500 Index’s gain of 11.03% for the same period. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.

Baron Discovery Fund, in its Q4 2021 investor letter, mentioned Boyd Gaming Corporation (NYSE: BYD) and discussed its stance on the firm. Boyd Gaming Corporation is a Las Vegas, Nevada-based gaming and hospitality company with a $6.4 billion market capitalization. BYD delivered a -11.97% return since the beginning of the year, while its 12-month returns are up by 15.88%. The stock closed at $57.72 per share on January 20, 2022.

Here is what Baron Discovery Fund has to say about Boyd Gaming Corporation in its Q4 2021 investor letter:

“During the quarter, we repurchased former holding Boyd Gaming Corporation. Boyd is an operator of 28 casinos in 10 states. The company is also a partner and 5% owner of online iGaming company FanDuel Group. We purchased the company during the quarter for three primary reasons: 1) we believe the company’s core casino assets are high quality and wellmanaged and recent margin gains can mostly be maintained go forward; 2) the company generates significant free cash flow that we do not believe the market is giving the company credit for (we expect the company to continue its aggressive share repurchases); and 3) the stock does not reflect the value of Boyd’s stake in FanDuel, which we believe can be worth a billion dollars in five to six years.”

Pixabay/Public Domain

Our calculations show that Boyd Gaming Corporation (NYSE: BYD) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. BYD was in 37 hedge fund portfolios at the end of the third quarter of 2021, compared to 36 funds in the previous quarter. Boyd Gaming Corporation (NYSE: BYD) delivered a -12.95% return in the past 3 months.

You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.

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