7. Red Rock Resorts, Inc. (NASDAQ:RRR)
Number of Hedge Fund Holders: 17
Red Rock Resorts, Inc. (NASDAQ:RRR) is a Nevada-based gaming, development, and management company that operates strategically located casinos and entertainment properties. The company has developed around $5 billion worth of regional gaming and entertainment destinations across various jurisdictions. It is also a recognized leader in Native American gaming, having developed several successful properties, including one currently managed in northern California. In Las Vegas, the company’s properties are strategically distributed throughout the market, making them highly accessible, with over 90% of the city’s population residing within five miles of one of its gaming facilities.
Red Rock Resorts, Inc. (NASDAQ:RRR) reported strong earnings in the second quarter of 2024. The company’s revenue for the quarter came in at $$486.4 million, up 17% from the same period last year. Its Las Vegas operations also showed a 17% YoY growth from the prior-year period at $483.2 million. The company’s stable cash position indicates a solid foundation for future expansion projects.
Baron Funds highlighted the growth prospects of Red Rock Resorts, Inc. (NASDAQ:RRR) in its Q2 2024 investor letter. Here is what the firm has to say:
“Shares of Red Rock Resorts, Inc. (NASDAQ:RRR), an owner and operator of casinos in the Las Vegas Locals market, declined 7.7% in the second quarter and hurt performance by 35 bps. This was due to slower-than-expected growth in the Las Vegas Locals market and greater-than-expected cannibalization of its casinos from the opening of its new Durango casino late last year. The Durango casino is generating strong results that should enable Red Rock to meet its projected 20% return on invested capital, pay down debt, and return to its targeted leverage ratio of 3 times by the end of next year. We believe the new casino combined with continued market growth should generate high single-digit growth in EBITDA and double-digit free cash flow growth over the coming years. Red Rock currently has over 300 acres of gaming-entitled land to develop. Its margins remain above pre-pandemic levels, despite increasing wage costs, thanks to strong incremental margins on revenue generated from its new resort.”
Red Rock Resorts, Inc. (NASDAQ:RRR), one of the best casino stocks that pay dividends, has remained committed to its shareholder obligation. In the most recent quarter, the company returned $27.5 million to investors through dividends. It offers a per-share dividend of $0.25 every quarter and has a dividend yield of 1.85%, as of September 12.
Red Rock Resorts, Inc. (NASDAQ:RRR) was a popular buy among elite funds at the end of Q2 2024, as hedge fund positions in the company grew to 17, from 13 in the previous quarter, as per Insider Monkey’s database. The stakes owned by these funds have a total value of over $203.6 million. Among these hedge funds, Diamond Hill Capital was the company’s leading stakeholder in Q2.
