We recently compiled a list of the HG Vora Capital Management’s Stock Picks For 2025. In this article, we are going to take a look at where PENN Entertainment, Inc. (NASDAQ:PENN) stands against the other stocks.
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.
The bright and neon lights of a glitzy casino, revealing the company’s iCasino and gaming properties.
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, Inc. (NASDAQ:PENN), 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.”
Overall PENN ranks 5th on our list of HG Vora Capital Management’s stock picks for 2025. While we acknowledge the potential of PENN as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an 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.
