In this article we’re going to take a closer look at Parag Vora‘s HG Vora Capital Management’s Stock Picks for 2025.
HG Vora Capital Management was founded in 2009 as a hedge fund specializing in investing in event-driven, credit, and distressed special situations. The New York-based hedge fund has more than $5 billion in assets under management and reported more than $1.3 billion in securities in its latest 13F filing. While it is not positioning itself as an activist fund, HG Vora Capital has engaged with companies’ management on several occasions. As we go through some of HG Vora Capital’s stock picks, we will see some examples of the interactions that the fund had or is having with the companies it’s invested in.
Parag Vora, the founder of HG Vora, is a seasoned investor with decades of experience. Prior to founding HG Vora, Parag worked at Silver Point Capital, focusing on distressed assets and event-driven opportunities. Before Silver Point, Parag served as a Vice President in the Investment Banking Division at Goldman Sachs, advising real estate and consumer companies on M&A and leveraged financing.
HG Vora usually holds a relatively concentrated portfolio. However, over the last several years, the fund’s equity portfolio somewhat scaled down. At the end of 2021, HG Vora held 24 positions with a total value of $2.79 billion, according to its 13F filing for the period. It’s worth mentioning that such fluctuations in portfolio size can be observed during previous years as well. The reduced equity portfolio size could be attributed to a more attractive debt market driven by higher interest rates or other catalysts. During a panel at the Global Alts 2023 event, Parag said that it was “an amazing time to own safer first-lien debt where you can make equity-like returns.”
In its Q4 2024 13F filing, HG Vora Capital reported ownership in 10 companies as of the end of 2024. In a subsequent filing with the Securities and Exchange Commission, HG Vora disclosed closing its only healthcare bet – ModivCare Inc (NASDAQ:MODV), in which it had previously held 1.0 million shares.
Currently, most companies in HG Vora Capital’s 13F portfolio are operating in the resort and casino industry. Most holdings are long-term investments that Parag Vora’s fund has been bullish on for at least three years. Without any further ado, let’s take a look at HG Vora Capital Management’s stock picks heading into 2025.
9. United Parks & Resorts Inc. (NYSE:PRKS)
Shares held by HG Vora Capital Management: 500,000
Value of Position: $28.1 million
In United Parks & Resorts Inc. (NYSE:PRKS), HG Vora has held shares since the third quarter of 2023. During the last three months of 2024, the position was slashed by more than 60%. United Parks & Resorts Inc. (NYSE:PRKS) is a US-based operator of theme parks and recreational destinations, holding brands like SeaWorld and Busch Gardens in its portfolio. Given that vacations are often seen as a discretionary expense, United Parks & Resorts Inc. (NYSE:PRKS) has a lot riding on where the US economy is headed in terms of inflation and cost of living. Moreover, Universal Orland Resort is planning to open Universal Epic Universe. With many of United Parks & Resorts Inc. (NYSE:PRKS) located in Florida, as well, the company will face higher competition from a new attraction. On the other hand, the new attraction could boost the number of tourists in the region, some of whom might choose to visit some of United Parks & Resorts Inc. (NYSE:PRKS)’s locations. Moreover, trading at just 11.3 times its forward earnings, United Parks & Resorts deserves more attention for a potential investment.
8. Caesars Entertainment Inc (NASDAQ:CZR)
Shares held by HG Vora Capital Management: 2.25 million
Value of Position: $75.20 million
On the other hand, during the fourth quarter of 2024, HG Vora Capital Management boosted its position in Caesars Entertainment Inc (NASDAQ:CZR) by 1.75 million shares. The bet has paid off so far this year, as the stock is more than 18% in the green. Interestingly enough, HG Vora added Caesars Entertainment Inc (NASDAQ:CZR) during the fourth quarter of 2021, when the stock was trading around its all-time highs. As one of the most well-known brands for casinos and hospitality in Las Vegas, Caesars Entertainment stands to benefit from a rebound in tourism and its return to pre-pandemic levels, according to the latest trends. However, the company’s last quarterly results showed a decline in revenue both for the Las Vegas segment and Regional, of 1.3% and 7.6%, respectively. Nonetheless, Caesars Entertainment Inc (NASDAQ:CZR) has been aggressively expanding in the online segment and for the third quarter of 2024, the Digital segment posted revenue growth of nearly 41% to $303 million, helping inch up the total quarterly revenue by 2.6% to $2.9 billion. At the same time, the company swung to a loss of $0.04 per share and missed the consensus estimate by $0.25.
7. MGM Resorts International (NYSE:MGM)
Shares held by HG Vora Capital Management: 3.0 million
Value of Position: $103.95 million
MGM Resorts International (NYSE:MGM) is another casino & hospitality company that saw Parag Vora’s fund increase its holding by 20% during the fourth quarter. MGM Resort’s stock recently saw a spike of 17% following better-than-expected results for the fourth quarter. MGM Resorts posted revenue of $4.35 billion and EPS of $0.45, which topped the consensus estimates by $79.75 million and $0.11, respectively. Similar to Caesars Entertainment Inc (NASDAQ:CZR), MGM Resorts International saw a decline in the Las Vegas segment revenue, but its Regional operations, MGM China, and MGM Digital recorded higher sales. On the back of positive results, several analysts raised their outlook on the stock. For example, Argus upgraded the stock to ‘Buy’ with a $50 price target, while Citigroup, Wells Fargo, and Barclays raised their price targets to $50, $46, and $47, respectively and reiterated their bullish ratings.
6. Driven Brands Holdings Inc (NASDAQ:DRVN)
Shares held by HG Vora Capital Management: 7.40 million
Value of Position: $119.44 million
Next on the list of HG Vora Capital Management’s Stock Picks is Driven Brands Holdings Inc (NASDAQ:DRVN), which owns a portfolio of North American automotive service brands, including Take 5 Oil Change, Meineke Car Care Centers, and 1-800-Radiator & A/C. HG Vora Capital Management added Driven Brands to its equity portfolio during the fourth quarter of 2023, after the stock plummeted by some 60% between May and October. In August 2023, after weaker-than-anticipated quarterly results, Driven Brands Holdings Inc (NASDAQ:DRVN) had to slash its guidance and the management stated that it would have to cut the scope of its auto-glass network by a third due to issues with integrating the auto-glass network. Later, Driven Brands had to take a goodwill impairment of $1.0 billion on its car wash segment after previously having disclosed declines in same store car wash sales. Nevertheless, in 2024, the company showed some signs of recovery with its stock gaining more than 20%. In its last quarterly report, for the third quarter of 2024, Driven Brands Holdings Inc (NASDAQ:DRVN) posted adjusted EPS of $0.26, beating the consensus estimate of $0.22, while its revenue of $591.7 million was slightly lower than anticipated and grew by 2% on the year, while same store sales appreciated by 1.1% on the year. The growth was driven by strong performance of the Take 5 Oil Change segment, which recorded 15% revenue growth and a 5% same store sales increase.
5. Penn Entertainment Inc (NASDAQ:PENN)
Shares held by HG Vora Capital Management: 7.25 million
Value of Position: $143.33 million (estimated)
In Penn Entertainment, Parag Vora’s fund has held shares since the second quarter of 2022. At the end of 2024, the fund held 14.50 million shares of the company worth $287.39 million. However, in a recent 13D filing, the fund disclosed ownership of 7.25 million shares accounting for 4.8% of the outstanding stock. The date of event disclosing the sale was January 13 and the value of the position is calculated based on the closing price on that day. After disclosing reducing its position, HG Vora Capital Management issued a press release stating that the fund nominated three candidates to Penn Entertainment Inc (NASDAQ:PENN)’s board of directors. HG Vora added that they believe there is “significant unrealized value” in Penn’s regional casino portfolio and collection of Interactive assets. The fund also pointed out that the company’s stock has underperformed dramatically both against the broader market and its closest peer, Boyd Gaming Corp (NYSE:BYD).
“PENN’s Board has overseen a misguided Interactive strategy that has resulted in the reckless spending of nearly $4 billion – greater than the Company’s entire market capitalization – on overpriced, poorly negotiated M&A transactions and media partnerships that have resulted in large ongoing operating losses due to an inability to execute. The Company’s Interactive strategy has been an abject failure due to a pattern of overpaying, overpromising, and not delivering,” Parag Vora was quoted as saying.
In a separate statement, Penn Entertainment Inc (NASDAQ:PENN) confirmed the receipt of nominations and said that they are committed to creating “long-term value for all shareholders.”
4. Boyd Gaming Corp (NYSE:BYD)
Shares held by HG Vora Capital Management: 2.0 million
Value of Position: $145.08 million
In Boyd Gaming Corp (NYSE:BYD), HG Vora Capital trimmed its stake by a third during the fourth quarter. In contrast with Penn Entertainment, the fund has not engaged with Boyd Gaming Corp and has held shares since at least the fourth quarter of 2020 seeing the stock gain more than 80% since then. Boyd Gaming Corp (NYSE:BYD) is a diversified casino operator that has properties across 10 US states, including California and Nevada. Moreover, similar to other casino operators mentioned earlier, Boyd has also expanded into the online gambling segment of the market. Recently, Boyd Gaming Corp has disclosed its financial results for the fourth quarter, with both EPS of $1.06 and revenue of $1.04 billion coming in stronger than expected. Moreover, Boyd Gaming has been paying dividends for the past several years and last year it raised the payout to $0.17 per share.
3. Playa Hotels & Resorts NV (NASDAQ:PLYA)
Shares held by HG Vora Capital Management: 12.50 million
Value of Position: $158.13 million
Playa Hotels & Resorts NV (NASDAQ:PLYA) was added to HG Vora’s equity portfolio during the fourth quarter of 2018 and the stock advanced by more than 85% over the past six years. Recently, hospitality operator Hyatt Hotels Corporation (NYSE:H) announced reaching an agreement to acquire Playa Hotels for $13.50 per share or around $2.6 billion including $900 million of debt. The deal will provide Playa shareholders with a 40% premium to the stock price prior to the disclosure of exclusive discussions with Hyatt.
Hyatt plans to take an asset-light approach and if the acquisition is successful, it will try to sell Playa’s owned properties while securing management agreements. The asset-light strategy allows Hyatt to generate capital from sales of real estate, while also generating revenue from management fees and franchise agreements.
2. Ryder System Inc (NYSE:R)
Shares held by HG Vora Capital Management: 1.20 million
Value of Position: $188.23 million
In Ryder System Inc (NYSE:R), Parag Vora’s fund cut its stake by 455,000 shares during the fourth quarter, but, nonetheless, the position ranked as the fund’s second-largest. Ryder System is the only transportation and logistics bet in the fund’s equity portfolio. Moreover, back in 2022, HG Vora tried to acquire Ryder System and proposed an unsolicited bid of $86 per share. At the time, the fund held nearly 10% of the company. However, Ryder System Inc (NYSE:R) rejected the offer as not indicative of the company’s value. HG Vora remained bullish on the company and the bet paid off as Ryder System’s shares are up by more than 120% since June 2022. Over the past year alone, Ryder System Inc (NYSE:R) delivered better-than-expected earnings, while its revenue growth was mostly in the middle to high single-digits, albeit missed the consensus in the last three quarters. For the current year, Ryder System Inc (NYSE:R) expects revenue growth of around 2% and EPS between $13 and $14, which is in line with current estimates and shows a slight increase from the $12 figure reported for 2024.
1. First American Financial Corp (NYSE:FAF)
Shares held by HG Vora Capital Management: 3.345 million
Value of Position: $208.86 million
Last but not least, First American Financial Corp (NYSE:FAF) is the only financial pick in HG Vora’s equity portfolio and it represents its largest holding. First American Financial Corp (NYSE:FAF) provides title insurance and settlement services to real estate and mortgage businesses, operating in both commercial and residential markets. The company generates most of its revenue from the title insurance and services segment (for the fourth quarter, title insurance revenue was $1.61 billion versus total revenue of $1.69 billion) so its performance is negatively impacted by higher interest rates, which leads to fewer real estate transactions (title insurance is most commonly bought when a house is acquired through a mortgage deal or refinanced). Going forward provided the interest rates are expected to decline and the housing market continues to experience high demand, First American Financial Corp (NYSE:FAF) is likely to see an increase in sales.
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