Is Penn National Gaming (PENN) a Smart Long-term Buy?

Baron Discovery Fund recently published its third-quarter commentary – a copy of which can be downloaded here. During the third quarter of 2020, the Baron Discovery Fund returned 18.83% (institutional shares). This was 11.67% better than the Russell 2000 Growth Index, the Fund’s primary benchmark index. You should check out Baron Discovery Fund’s top 5 stock picks for investors to buy right now, which could be the biggest winners of 2021.

In the Q3 2020 Investor Letter, Baron Discovery Fund highlighted a few stocks and Penn National Gaming Inc (NASDAQ:PENN) is one of them. Penn National Gaming Inc (NASDAQ:PENN) is the casino company. Year-to-date, Penn National Gaming Inc (NASDAQ:PENN) stock gained 174% and on December 1st it had a closing price of $70.03. Here is what Baron Discovery Fund said:

“Shares of regional casino company Penn National Gaming, Inc. increased in the quarter on news of strong betting activity after the early September launch of Penn’s Barstool online sports betting application. Penn reported quarterly revenue and earnings results that beat investor expectations driven by robust margin growth across all of its casino properties. This margin expansion was especially impressive as revenues continue to be challenged by fewer customer visits due to COVID-19. Penn was able to more than offset the lower revenue by limiting non-gaming amenities and using targeted marketing to make sure it had the most profitable consumers in its casinos. The better-than-expected profitability, combined with a recent equity offering, helped Penn significantly improve its balance sheet. We think the stronger balance sheet will allow Penn to be in a better position to invest and aggressively grow its online sports betting operations going forward.”

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In October, we published an article revealing that Penn National Gaming Inc (NASDAQ:PENN) stock is one of the 5 stocks that could have great near term growth potential. Cristan Blackman’s Empirical Capital Partners is also bullish on Penn National Gaming Inc (NASDAQ:PENN) stock.

In Q2 2020, the number of bullish hedge fund positions on Penn National Gaming Inc (NASDAQ:PENN) stock increased by about 89% from the previous quarter (see the chart here), so a number of other hedge fund managers believe in Penn’s growth potential. Our calculations showed that Penn National Gaming Inc (NASDAQ:PENN) isn’t ranked among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 216% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 121 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

Video: Top 5 Stocks Among Hedge Funds

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