This article presents an overview of the 5 Best Gambling Stocks to Buy Now. For a detailed overview of such stocks, read our article, 15 Best Gambling Stocks to Buy Now.
5. MGM Resorts International (NYSE:MGM)
Number of Hedge Fund Investors: 45
With 45 hedge fund stakeholders and a strong position in the industry, MGM Resorts International (NYSE:MGM) is one of the best gambling stocks to buy according to hedge funds. Some notable hedge funds having stakes in the company as of the end of 2023 are Keith Meister’s Corvex Capital, Ken Fisher’s Fisher Asset Management and Mason Hawkins’ Southeastern Asset Management.
Longleaf Partners Fund stated the following regarding MGM Resorts International (NYSE:MGM) in its fourth quarter 2023 investor letter:
“MGM Resorts International (NYSE:MGM) & Hyatt – Hospitality companies MGM Resorts and Hyatt were both strong performers in the fourth quarter and for the year, outperforming expectations that the post-COVID travel rebound would ease in 2023. Casino and online gaming company MGM saw double-digit revenue growth and strong 2023 bookings in Las Vegas in the first half, which moderated in the second half but remained solid. A cybersecurity attack negatively impacted 3Q results, but MGM does not expect the $100 million hit to have a material effect on its financial condition and operational results for the year. MGM bought back discounted shares at a 15% annualized rate and authorized another $2 billion buyback in 4Q, which represents another 15% of the company.”
4. Wynn Resorts, Limited (NASDAQ:WYNN)
Number of Hedge Fund Investors: 46
Earlier in April, Mizuho Securities started covering Wynn Resorts (NASDAQ:WYNN) with a Buy rating. The analyst firm is bullish on the stock on the back of recovery in Macau and hopes of business growth in Las Vegas.
Baron Real Estate Fund stated the following regarding Wynn Resorts, Limited (NASDAQ:WYNN) in its fourth quarter 2023 investor letter:
“The shares of Wynn Resorts, Limited (NASDAQ:WYNN), an owner and operator of hotels and casino resorts, declined modestly in the most recent quarter, in part due to concerns about economic weakness in China.
We remain optimistic about the multi-year prospects for the company. We believe the ongoing re-emergence of business activity in Macau will drive additional shareholder value. If cash flow returns to the level achieved in 2019 prior to COVID-19, we believe Wynn’s shares will increase 30% to 50% higher than where they have recently traded.
We believe additional drivers for future value creation beyond a re-emergence in Macau business activity include: (i) our expectation for long-term growth opportunities in the company’s U.S.-centric markets of Las Vegas and Boston, including an expansion of Wynn’s Encore Boston Harbor resort; (ii) Wynn’s plans to develop an integrated resort in the United Arab Emirates with 1,500 hotel rooms and a casino that is similar in size to that of Encore Boston Harbor; (iii) opportunities to improve cash-flow margins by rightsizing labor and achieving lower staff costs in Macau; (iv) the possibility that Wynn is granted a New York casino license; and (v) an expansion in the company’s valuation multiple to levels achieved prior to the pandemic.”
3. Las Vegas Sands Corp (NYSE:LVS)
Number of Hedge Fund Investors: 48
Las Vegas Sands Corp (NYSE:LVS) is one of the dividend-paying gambling stocks, with a 1.79% dividend yield as of April 30. The company earlier this month posted solid Q1 results. EPS in the period came in at $0.75, beating estimates by $0.13. Revenue in the period jumped about 40% on a YoY basis to reach $2.96 billion, surpassing estimates by $20 million.
2. DraftKings Inc. (NASDAQ:DKNG)
Number of Hedge Fund Investors: 55
DraftKings Inc. (NASDAQ;DKNG) shares have been performing well this year, up 24% through April 30. A total of 55 hedge funds were long DKNG as per Insider Monkey’s database of 933 hedge funds.
Baron Discovery Fund stated the following regarding DraftKings Inc. (NASDAQ;DKNG) in its fourth quarter 2023 investor letter:
“We added to our position in DraftKings Inc. (NASDAQ;DKNG), the leading mobile sportsbook and gaming operator in the U.S. While we lowered our estimates for the fourth quarter due to lower hold in the month of November, it is important to keep in mind that while hold can be volatile from quarter to quarter, the company continues to slowly increase hold over time (primarily because of a higher percentage of the handle being in higher hold “parlay” bets). We continue to be attracted to DraftKing’s dominant market share and the scale advantages that come with this.”
1. Caesars Entertainment Inc (NASDAQ:CZR)
Number of Hedge Fund Investors: 65
Gambling giant Caesars Entertainment, Inc. (NASDAQ:CZR) is the most popular gambling stock among the 933 elite money managers tracked by Insider Monkey. Of the 65 funds having stakes in the company, Parag Vora’s HG Vora Capital Management had the biggest stake in the company, valued at $239 million.
Baron Real Estate Fund stated the following regarding Caesars Entertainment, Inc. (NASDAQ:CZR) in its first quarter 2024 investor letter:
“The shares of Caesars Entertainment, Inc. (NASDAQ:CZR), the largest casino-entertainment company in the U.S. and one of the world’s most diversified casino-entertainment providers, declined 7.0% in the first quarter in part due to expectations that first quarter results may be negatively impacted by bad weather. The move higher in interest rates also negatively impacted certain highly leveraged companies such as Caesars.
We are big fans of CEO Tom Reeg and remain optimistic about the long-term prospects for the company for the following reasons: 1. We are optimistic about the long-term prospects for Las Vegas, which represents approximately 50% of Caesars’ cash flow (with 50% of its cash flow generated from regional destination markets). We believe that Las Vegas has structurally changed and has a year-round business and event calendar that has effectively eliminated off-peak months or lulls in business activity…” (Click here to read the full text)
Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below. You can also look at the 10 Best Long Term Low Risk Stocks to Buy and the 11 Best Home Appliance Stocks to Invest In.