We recently published a list of 10 Best Stocks to Buy According to Billionaire David Einhorn. In this article, we are going to take a look at where PENN Entertainment, Inc. (NASDAQ:PENN) stands against other best stocks to buy according to billionaire David Einhorn.
David Einhorn is a highly regarded hedge fund manager, who co-founded Greenlight Capital in 1996. Einhorn shot to fame after he correctly forecasted the collapse of Lehman Brothers during the financial crisis. He graduated from Cornell University and garnered his skills in the hedge fund industry under the mentorship of Gary Siegler and Peter Collery at the SC Fundamental Value Fund. Due to his prowess in long/short equity strategies, David Einhorn is being tagged as one of the most successful hedge fund managers.
Greenlight Capital’s Investment Philosophy
Greenlight Capital specializes in value-oriented strategies. The investment management firm primarily focuses on long and short positions in the listed equity securities and selectively engages in distressed debt investments during favorable economic cycles. Einhorn is a highly-regarded hedge fund manager who uses a long-short investment strategy. Because of this strategy, he can capitalize on both rising and falling markets, providing him flexibility during uncertainties.
The Greenlight Capital funds (the Partnerships) managed to return 7.2% in 2024, net of fees and expenses, as compared to 25.0% for the broader S&P 500 index. However, since the inception of Greenlight Capital, the Partnerships returned 3,117% cumulatively or 12.9% annualized, both net of fees and expenses. Over the same period, the S&P 500 index delivered 1,421% or 10.0% annualized. Notably, Greenlight’s investors earned $5.7 billion, net of fees and expenses, since inception.
READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.
Greenlight Capital’s Views on Current Market Dynamics
CNBC, while quoting the comments of Greenlight Capital’s David Einhorn, mentioned that speculative behavior in the current bull market has reached beyond common sense. As per the firm’s Q4 2024 investor letter, the investors continue to experience a ‘Fartcoin’ stage of the market cycle. To give a brief context, Fartcoin is a cryptocurrency that came into existence late last year. Apart from trading and speculation, no other obvious purpose is being served and no need that is not being served elsewhere is being fulfilled. Einhorn went on to add that the investors might be leaving the Fartcoin stage of the market and entering the Trump (and Melania) memecoin stage. While the certainty about the possible outcome remains unpredictable, it is going to be wild, says David Einhorn.
Amidst these trends, let us now have a look at the 10 Best Stocks to Buy According to Billionaire David Einhorn.
Our Methodology
To list the 10 Best Stocks to Buy According to Billionaire David Einhorn, we selected the top 10 stocks in Greenlight Capital’s portfolio as per its Q4 2024 13F filing. We settled on the hedge fund’s 10 biggest holdings. Finally, we ranked the stocks in ascending order based on the value of Greenlight Capital’s equity stakes. Additionally, we have mentioned the hedge fund sentiment around each stock, as of Q4 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
The bright and neon lights of a glitzy casino, revealing the company’s iCasino and gaming properties.
PENN Entertainment, Inc. (NASDAQ:PENN)
Greenlight Capital’s Stake Value: $113.9 million
Number of Hedge Fund Holders: 51
PENN Entertainment, Inc. (NASDAQ:PENN) offers integrated entertainment, sports content, and casino gaming experiences. Jason Tilchen from Canaccord Genuity maintained a “Buy” rating on the company’s stock with a price objective of $28.00. The analyst’s rating was backed by factors demonstrating the company’s potential for growth and profitability. PENN Entertainment, Inc. (NASDAQ:PENN) reported healthy Q4 2024 results, as its diverse geographic presence in land-based casinos and improved digital platform supported to counteract elevated competition in certain markets.
Furthermore, the research firm believes that the company’s growth projects, like the new Hollywood Casino Joliet and other developments, remain on track to improve its regional casino business. These factors, together with a stable retail outlook as well as strategic initiatives, offer an attractive risk/reward opportunity for investors. PENN Entertainment, Inc. (NASDAQ:PENN) highlighted that the success of its iCasino business was aided by the continued healthy momentum from the recent launches of its standalone Hollywood Casino app in Pennsylvania and Michigan. Elsewhere, analyst Bernie McTernan of Needham maintained a “Buy” rating on the company’s stock. The analyst believes that the partnership between PENN Entertainment, Inc. (NASDAQ:PENN) and Disney, mainly through ESPN Bet, still possesses the potential for creating shareholder value.
Overall, PENN ranks 6th on our list of the 10 Best Stocks to Buy According to Billionaire David Einhorn. While we acknowledge the potential of PENN as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued AI stock that is more promising than PENN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
