7 Best Small-Cap Casino Stocks Hedge Funds Are Buying

4. Monarch Casino & Resort, Inc. (NASDAQ:MCRI)

Number of Hedge Fund Holders: 14

Market Capitalization as of August 21: $1.36 billion

Monarch Casino & Resort, Inc. (NASDAQ:MCRI) together with its subsidiaries operates in the entertainment and hospitality services industry. The company operates two major properties including the Monarch Casino Resort Spa in Black Hawk, Colorado, and the Atlantis Casino Resort Spa in Reno, Nevada.

It operates through several business segments including Casino Operations, Hotel and accommodation, Dining and Beverage Services, Spa and Recreation, and Event and Meeting Space segment.

The Casino Operations of Monarch Casino & Resort, Inc. (NASDAQ:MCRI) includes around 60,000 square feet of gaming space that has over 1000 slot machines and 43 table games in its Monarch Black Hawk Resort. On the other hand, its Atlantis has more than 61,000 square feet of casino space with 1200 slot machines and 33 table games.

The company posted robust second-quarter results for 2024 beating analysts’ expectations both in terms of revenue and earnings. Revenue of Monarch Casino & Resort, Inc. (NASDAQ:MCRI) for the quarter grew 3.6% to reach $128.14 million beating analyst expectations by $1.84 million. Revenue growth was on the back of strong performance across the board, most notably its Casino revenue improved by 3%, and hotel revenues improved by 9% year-over-year to deliver record second-quarter overall revenue for the company.

Management’s focus on operational efficiency resulted in its adjusted EBITDA margins improving from 34.1% to 34.3%. The adjusted EBITDA of the company was recorded at $43.9 million a 4.3% increase year-over-year, indicating operational profitability.

So, should you invest in Monarch Casino & Resort, Inc. (NASDAQ:MCRI)?

During the past decade, the company has depicted its ability to generate revenue and cash from its operations. Monarch Casino & Resort, Inc. (NASDAQ:MCRI) has been able to grow its top line by 11%, and its bottom line by 20% while improving its levered free cash flow by 19% during the past 10 years.

MCRI can be a good investment to consider because, despite trading at a slight premium to its sector, the earnings of the company are expected to grow by 22% during the year to reach $1.13. Moreover, the stock was held by 14 hedge funds in Q2 2024, with total stakes worth $39.46 million. Citadel Investment Group is the top stakeholder with a position worth $11.64 million.