In this article, we discuss the 5 cheap gaming stocks to buy now. If you want to read about some more cheap gaming stocks to buy now, go directly to 10 Cheap Gaming Stocks to Buy Now.
5. International Game Technology PLC (NYSE:IGT)
Number of Hedge Fund Holders: 29
Share Price as of December 5: $25.04
International Game Technology PLC (NYSE:IGT) operates and provides gaming technology products and services in North America, Europe, the Middle East, Africa, Asia-Pacific, Latin America, and the Caribbean. On October 12, International Game Technology said that its subsidiary, IGT Global Solutions, signed a seven-year extension with Georgia Lottery to deploy its world-class lottery and iLottery products and technology with the firm. The contract expansion will run through September 2032.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Antara Capital is a leading shareholder in International Game Technology PLC (NYSE:IGT) with 3 million shares worth more than $47.4 million.
In its Q3 2022 investor letter, Palm Harbour Capital, an asset management firm, highlighted a few stocks and International Game Technology PLC (NYSE:IGT) was one of them. Here is what the fund said:
“The fifth largest detractor was International Game Technology PLC (NYSE:IGT), a world-leading operator of lotteries and gaming machines, which we introduced in our first quarter 2020 letter. The share price decreased by 8.3% losing 36 basis points for the fund. Management tightened full-year guidance to reflect currency movements and reconfirmed the operating income margin as fundamentals remain strong.
IGT also announced a $270 million settlement related to Double Down Interactive which was higher than the $150 million which the company set aside during the second quarter of 2022. Despite foreign exchange headwinds from the weaker euro, we are optimistic that they will continue to deliver and pay higher shareholder remuneration in the coming quarters as we believe the lottery business will remain robust even factoring in a recession.”
4. PENN Entertainment, Inc. (NASDAQ:PENN)
Number of Hedge Fund Holders: 30
Share Price as of December 5: $34.79
PENN Entertainment, Inc. (NASDAQ:PENN) provides integrated entertainment, sports content, and casino gaming experiences in North America. On November 14, Penn Entertainment rose 6.2% on speculation of a potential activist investor interest. On November 3, PENN National posted earnings for the third quarter of 2022, reporting earnings per share of $0.72, beating market estimates by $0.37. The revenue over the period was $1.6 billion, up 6.0% compared to the revenue over the same period last year and beating market estimates by $20 million.
On November 3, CBRE analyst John DeCree maintained a Buy rating on PENN Entertainment, Inc. (NASDAQ:PENN) stock and lowered the price target to $54 from $57, highlighting that the company’s third-quarter results were solid with better casino trends offsetting a slightly wider than expected interactive loss due to some one-time items.
At the end of the third quarter of 2022, 30 hedge funds in the database of Insider Monkey held stakes worth $423.8 million in PENN Entertainment, Inc. (NASDAQ:PENN), compared to 33 in the previous quarter worth $455.8 million.
In its Q3 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and PENN Entertainment, Inc. (NASDAQ:PENN) was one of them. Here is what the fund said:
“Shares of gaming company PENN Entertainment, Inc. (NASDAQ:PENN) declined 9.6% in the quarter and penalized performance by 10 bps. This was due to investor concerns that a potential recession would result in a slowdown or decline in its earnings growth rate. However, thus far, the company has seen no material change in visitation or spending levels, and its earnings remain strong. PENN is generating strong cash flow, which it continues to use to invest in its digital growth opportunity while using excess cash to buy back its stock. PENN is well positioned to weather a slowdown or recession, and we believe that even if one does occur, the company would still generate revenue and EBITDA above pre-pandemic levels. We consider the $50 million of losses this year from its digital business to be modest about PENN’s over $1 billion of EBITDA from its casino business. The losses from its digital business represent customer acquisition costs incurred as additional states legalize online gambling. Since it is far less expensive to retain existing customers than to acquire new ones, we expect marketing costs to decline as PENN builds its customer base. PENN’s core bricks and mortar casino business remains strong, and the company’s healthy regional casino business and strong balance sheet enable it to absorb its digital losses.”
3. Roblox Corporation (NYSE:RBLX)
Number of Hedge Fund Holders: 38
Share Price as of December 5: $33.49
Roblox Corporation (NYSE:RBLX) develops and operates an online entertainment platform. On November 9, Roblox posted earnings for the third quarter of 2022, reporting losses per share of $0.50, missing market estimates by $0.16. The revenue over the period was $701.72 million, up 10.0% compared to the revenue over the same period last year and beating market estimates by $12.47 million.
On November 21, Citi analyst Jason Bazinet maintained a Buy rating on Roblox Corporation (NYSE:RBLX) stock and lowered the price target to $48 from $55, noting that the updated model on the firm factored in third-quarter results.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Renaissance Technologies is a leading shareholder in Roblox Corporation (NYSE:RBLX) with 10.6 million shares worth more than $380.7 million.
In its Q4 2021 investor letter, Tao Value, an asset management firm, highlighted a few stocks and Roblox Corporation (NYSE:RBLX) was one of them. Here is what the fund said:
“Roblox Corporation (NYSE:RBLX) got significantly more attention from both institutional & retail investors after Facebook announced to rename itself as Meta Platforms. I believe the price appreciation is largely attributed to the increased attention. On the business side, Roblox rolled out a few successful music events and also partnered with Netflix on testing long-form media consumption in the virtual world. Apple in its iOS 14.5 rolled out an impactful change for the digital advertising landscape by requiring all apps to ask users to “opt-in”.
2. Las Vegas Sands Corp. (NYSE:LVS)
Number of Hedge Fund Holders: 48
Share Price as of December 5: $47.52
Las Vegas Sands Corp. (NYSE:LVS) develops, owns, and operates integrated resorts in Asia and the United States. On November 26, Macao revealed that it has tentatively renewed the casino licenses of MGM Resorts, Las Vegas Sands, Wynn Resorts and three Chinese rivals after they promised to help diversify its economy by investing in non-gambling attractions. The stock of Las Vegas rose as a result.
On November 28, JPMorgan analyst Joseph Greff maintained an Overweight rating on Las Vegas Sands Corp. (NYSE:LVS) stock and raised the price target to $51 from $44, highlighting the stock’s risk/reward had improved given the anticipation of continued positive inflection in visitation, revenues, and EBITDA at Marina Bay Sands, Singapore.
Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in Las Vegas Sands Corp. (NYSE:LVS) with 3.5 million shares worth more than $129.8 million.
In its Q3 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Las Vegas Sands Corp. (NYSE:LVS) was one of them. Here is what the fund 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.”
1. Cloudflare, Inc. (NYSE:NET)
Number of Hedge Fund Holders: 53
Share Price as of December 5: $45.69
Cloudflare, Inc. (NYSE:NET) operates as a cloud services provider that delivers a range of services to businesses worldwide. On November 3, Cloudflare posted earnings for the third quarter of 2022, reporting earnings per share of $0.06, missing market estimates by $0.06. The revenue over the period was $253.86 million, up 47.3% compared to the revenue over the same period last year and beating market estimates by $4.02 million. The cloud services offered by the firm are capable of delivering real-time gaming experiences to players at a massive scale. Cloudflare products are one of the reasons why cloud gaming has taken off in the past few years.
On November 7, Baird analyst Shrenik Kothari maintained an Outperform rating on Cloudflare, Inc. (NYSE:NET) stock and lowered the price target on Cloudflare to $67 from $80, highlighting that company is well positioned to navigate the macro and maintain strong growth rates.
At the end of the third quarter of 2022, 53 hedge funds in the database of Insider Monkey held stakes worth $629 million in Cloudflare, Inc. (NYSE:NET), compared to 41 in the preceding quarter worth $541 million.
In its Q3 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Cloudflare, Inc. (NYSE:NET) was one of them. Here is what the fund said:
“We continued to build our position in Cloudflare, Inc. (NYSE:NET) during the quarter as the shares declined with the overall software space and the long-term risk/ reward balance became more compelling. The company reported a strong second quarter, with revenue growth accelerating to 54%, as well as better gross and operating margins. Third-quarter guidance was also ahead of Wall Street expectations. Given Cloudflare’s proprietary network and massive global scale, its software products have a disruptive price-performance advantage over competitors. As the company introduces new products as well as disruptive packaging/pricing, its unit-level economics should continue to improve over time, with the company already well ahead of its long-term gross margin target of 74%, reporting 78.9% for the second quarter. This drives strong cross/upselling activity with customers, reflected in strong net-dollar expansion rates of more than 125%. Indeed, in the most recent quarters, customers purchasing five or more products reached 81% of the base, six or more products reached 70% of the base, and seven or more products reached 58% of the base. Enterprise penetration continues to be a key long-term driver, with 1,749 customers now spending over $100,000 annually with the company, growing 61% and now accounting for over 60% of total revenue. With approximately 152,000 paying customers at the end of last quarter, large enterprise customers still represent just 1% of total paid customers and thus a material growth opportunity in the coming years. We continue to have high confidence in the company’s ability to innovate at a rapid pace (announced 20 new products or enhancements in September alone), package and bundle with disruptive pricing, and take material share in its large and growing addressable markets.”
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