5 Best Casino and Betting Stocks to Buy Now

2. PENN National Gaming (NASDAQ:PENN)

No of HFs: 45

Total Value of HF Holdings: $1.18 Billion

The stock was mentioned as one of the Top 10 Sin Stocks to Buy Now. The top hedge fund holder of this stock is Alex Sacerdote’s Whale Rock Capital Management which had $421 million invested in the stock at the end of September. An insider purchased 27,777 shares at around $18 in May 2020. The stock is up 450% since then.

In an article, Alger Mid Cap Focus mentioned a few of their comments on the stock.

“Penn National operates 40 properties (casinos and racetracks) across 20 states. In February. Penn National purchased a 36% interest in Barstool Sports, an online sports media company with 66 million monthly active users. Penn National is using Barstool Sports as the brand of its digital strategy and retains 100% of the sports betting and online casino (iGaming) proceeds in the relationship. Traditional brick¬and-mortar casino gambling in the U.S. is not a growth industry: however, two unique growth areas exist for casino operators: online sports betting (OSB) and iGaming. More states are considering legalization of OSB and iGaming due to Covid¬19-related budget shortfalls, as gambling can raise substantial tax revenue. Importantly, data shows that sports betting and online casinos do not cannibalize brick-and-mortar casino revenues. Additionally, gaming companies must have a physical presence within the states where they seek to have online gambling and sports betting legalized, so Penn National’s brick-and-mortar facilities give the company an advantage in this area. Shares of Penn National performed strongly during the third quarter in response to the company’s brick-and-mortar properties recently generating higher margins compared to pre-Covid-19 levels. a result of the company cutting costs and increased customer spending. Investors also responded favorably to Barstool’s September launch of its Sportsbook app in Pennsylvania. Additionally. sports betting and online gaming levels have reached record highs in numerous states.”

Penn National Gaming, Inc (PENN)