5 Best Casino Stocks to Buy for 2023

In this article, we will be taking a look at the 5 best casino stocks to buy for 2023. To read our detailed analysis of these stocks and the casino industry, you can go directly to see the 14 Best Casino Stocks to Buy for 2023.

5. DraftKings Inc. (NASDAQ:DKNG)

Number of Hedge Fund Holders: 34

DraftKings Inc. (NASDAQ:DKNG) is a casino and gambling company operating a digital sports entertainment and gaming business. It is based in Boston, Massachusetts.

Susquehanna’s Joseph Stauff reiterated a Positive rating and a $19 price target on DraftKings Inc. (NASDAQ:DKNG) shares on November 22.

In November, DraftKings Inc. (NASDAQ:DKNG) saw a robust recovery in light of news that the Fed’s rate hikes could be coming to an end. The company has a strong consumer base, with its sports betting being live among 36% of the US population as of this October. In the second quarter, the company’s monthly paid users grew to 1.5 million, up 30% year-over-year.

There were 34 hedge funds long DraftKings Inc. (NASDAQ:DKNG) in the third quarter, with a total stake value of $830 million.

4. Boyd Gaming Corporation (NYSE:BYD)

Number of Hedge Fund Holders: 36

Boyd Gaming Corporation (NYSE:BYD) operates a multi-jurisdictional gaming company.

Joseph Stauff at Susquehanna holds a Positive rating on Boyd Gaming Corporation (NYSE:BYD) shares alongside a $72 price target as of October 26.

Boyd Gaming Corporation (NYSE:BYD) had $250 million in cash as of this October, and resumed modest dividend payouts as well, showing that it was beginning to become financially comfortable. Its operating cash flow was $967 million trailing three months, with a leveraged free cash flow of $487 million.

Our hedge fund data shows 36 funds long Boyd Gaming Corporation (NYSE:BYD) in the third quarter and 35 funds long the stock in the second quarter. Their total stake values were $809 million and $898 million, respectively.

Baron Funds, an asset management company, mentioned Boyd Gaming Corporation (NYSE:BYD) in its second-quarter 2022 investor letter. Here’s what the firm said:

“Boyd Gaming Corporation is one of the largest and most successful casino entertainment companies in the U.S. The company owns and operates 28 casino gaming properties in 10 states with a large presence in Las Vegas. Business conditions have been strong, yet the shares are valued at only 6 times 2022 estimated cash flow versus a long-term average of more than 9 times cash flow. The company maintains a strong and liquid balance sheet. Insiders own approximately 27% of the company. We believe Boyd is a compelling acquisition target.”

3. Las Vegas Sands Corp. (NYSE:LVS)

Number of Hedge Fund Holders: 48

Las Vegas Sands Corp. (NYSE:LVS) develops, owns, and operates integrated resorts in Asia and the US. The company is based in Las Vegas, Nevada.

CICC initiated coverage of shares of Las Vegas Sands Corp. (NYSE:LVS) on November 25 with an Outperform rating and a $54 price target.

Las Vegas Sands Corp. (NYSE:LVS) has a resilient balance sheet showing $5.84 billion in cash on hand, $7.64 in cash per share, and leveraged free cash flow of $2.22 billion. The company’s third-quarter results show rising revenue and easing losses, leading to a bullish case for its performance in 2023.

Las Vegas Sands Corp. (NYSE:LVS) was found among the 13F holdings of 48 hedge funds in the third quarter. Their total stake value was $880 million.

Baron Funds, an investment management company, mentioned Las Vegas Sands Corp. (NYSE:LVS) in its third-quarter 2022 investor letter. Here’s what the firm said:

“The shares of Las Vegas Sands Corp. (NYSE:LVS) performed well in the most recent quarter in part due to the decision by China’s central government to ease the visa policy for Macau, which should result in increased travel into Macau for the first time since the outbreak of COVID-19.

Sands is a global leader in the development and operation of luxury casino resorts in Macau and Singapore, and it maintains a liquid and investment grade balance sheet. We anticipate that management may begin to return capital to shareholders through dividends and share buybacks as Singapore and Macau recover.

The shares are valued at a significant discount to our assessment of replacement cost, and the company’s Macau operations are valued at only 7 times estimated cash flow.”

2. MGM Resorts International (NYSE:MGM)

Number of Hedge Fund Holders: 53

MGM Resorts International (NYSE:MGM) owns and operates casino, hotel, and entertainment resorts in the US and Macau. It operates through its Las Vegas Strip Resorts, Regional Operations, and MGM China segments.

Stephen Grambling at Morgan Stanley initiated coverage of MGM Resorts International (NYSE:MGM) shares with an Equal Weight rating and a $39 price target on November 21.

MGM Resorts International (NYSE:MGM) is considered one of the best US large-cap casino operator plays. The company’s BetMGM has brought in annualized revenues of $1.4 billion. This November, the company also declared a $0.0025 per share quarterly dividend.

In total, 53 funds were long MGM Resorts International (NYSE:MGM) in the third quarter and 46 hedge funds were long the stock in the previous quarter. Their total stake value was $1.1 billion for both quarters.

Baron Funds, an investment management company, mentioned MGM Resorts International (NYSE:MGM) in its third-quarter 2022 investor letter. Here’s what the firm said:

“MGM Resorts International (NYSE:MGM) is a leading global casino and entertainment company with 29 unique hotels and casinos including some of the most recognizable resort brands such as Bellagio, MGM Grand, ARIA, and Park MGM. At its recent price of only $30 per share, we believe MGM’s valuation is compelling at only 6 times 2023 estimated cash flow.”

1. Caesars Entertainment Inc. (NASDAQ:CZR)

Number of Hedge Fund Holders: 56

Caesars Entertainment Inc. (NASDAQ:CZR) is a gaming and hospitality company based in the US. It operates casinos comprising poker, keno, and race and online sportsbooks, among more.

Morgan Stanley’s Stephen Grambling initiated coverage of Caesars Entertainment Inc. (NASDAQ:CZR) on November 21 as well, with an Equal Weight rating and a $51 price target.

In 2020, Caesars Entertainment Inc. (NASDAQ:CZR) merged with Eldorado Resorts and became one of the largest casino and entertainment operators in the world. The company’s combined revenues shot up over the past few years to come to stand at about $10.4 billion by this October. It also raised an additional $1.3 billion in liquidity in 2020 by selling 23 acres of land on the Las Vegas strip, bringing it into a decent financial position.

Our hedge fund data shows 56 funds long Caesars Entertainment Inc. (NASDAQ:CZR) in the third quarter. Their total stake value was $730 million.

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