In this article, we discuss the 10 largest gambling stocks of 2021. If you want to skip our detailed analysis of the gambling and casino industry, go directly and read The 5 Largest Gambling Stocks of 2021.
Covid-19 took a toll on the gambling industry, due to the closure of casinos globally. American Gaming Association reported that the U.S. casino revenues plunged 31.3% in 2020, reaching their lowest since 2003. However, with the rise of online betting sites, the gambling and casino industry managed to get back on its feet after stumbling for a while. According to a report published by Research and Markets, the global gambling market is expected to grow at a CAGR of 7%, reaching $674.7 billion in 2025, from $516 billion in 2021.
The rise in online gambling has further stabilized the industry, which now offers lucrative investment opportunities. As sports betting is becoming legal in various states, the industry is catching investors’ eyes, as it saw over $5.95 billion worth of investments in Q3 of 2020, as reported by Forbes. It is estimated that online sports betting will be available to over 96% of the U.S. population by 2025. The sports betting industry alone is expected to generate revenues of $175.8 billion and is projected to reach $200 billion by 2023.
S&P 500 Casinos & Gaming Index gained 35.33% in the past year, compared with 34.2% returns of S&P 500 during the same time. With the rollout of vaccines, investors are expecting a rebound in gambling stocks. According to Jim Cramer, the vaccination process has made it easier for people to resume travel, which would enhance the casino and gambling activity in the U.S. Nevada casinos recorded $1.23 billion in winnings in May, reporting the highest single-month win in the state’s history.
Some of the notable gambling stocks include Caesars Entertainment, Inc. (NASDAQ:CZR), MGM Resorts International (NYSE:MGM), Las Vegas Sands Corp. (NYSE:LVS), Penn National Gaming, Inc. (NASDAQ:PENN), and Wynn Resorts, Limited (NASDAQ:WYNN).
Our Methodology:
Let’s analyze our list of the largest gambling stocks of 2021. The companies mentioned below specialize in online gaming, sports betting, and live casinos.
These are some of the most popular gambling and casino stocks among the 873 hedge funds tracked by Insider Monkey.
Copyright: sainaniritu / 123RF Stock Photo
Why pay attention to hedge fund sentiment while choosing stocks?
Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021, our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the S&P 500 ETF (SPY). Our stock picks outperformed the market by more than 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
The 10 Largest Gambling Stocks of 2021
10. Red Rock Resorts, Inc. (NASDAQ:RRR)
Number of Hedge Fund Holders: 26
Red Rock Resorts, Inc. (NASDAQ:RRR) is a leading gaming company, operating over 21 casinos and properties in the U.S. Recently, B. Riley appreciated the company’s launch of an online social casino, which will attract more customers. The firm lifted its price target on Red Rock Resorts, Inc. (NASDAQ:RRR) to $26, with a Buy rating on the shares.
At the end of Q2, 26 hedge funds tracked by Insider Monkey reported having stakes in Red Rock Resorts, Inc. (NASDAQ:RRR), compared with 28 in the previous quarter. The total value of these stakes is $658.2 million. Eminence Capital is the biggest shareholder of Red Rock Resorts, Inc. (NASDAQ:RRR) in Q2, owning roughly 5 million shares.
Since the beginning of the year, Red Rock Resorts, Inc. (NASDAQ:RRR) delivered a 108.1% return to shareholders, while the stock gained 191.1% in the past year.
Like Caesars Entertainment, Inc. (NASDAQ:CZR), MGM Resorts International (NYSE:MGM), Las Vegas Sands Corp. (NYSE:LVS), Penn National Gaming, Inc. (NASDAQ:PENN), and Wynn Resorts, Limited (NASDAQ:WYNN), Red Rock Resorts, Inc. (NASDAQ:RRR) is one of the notable stocks to buy in 2021.
Diamond Hill Capital mentioned Red Rock Resorts, Inc. (NASDAQ:RRR) in its Q2 2021 investor letter. Here is what the firm has to say:
“On an individual holdings’ basis, top contributors to return included Red Rock Resorts, a casino operator controlling over half the Las Vegas locals market. Red Rock is benefiting from pent-up demand, but it also executed well through the pandemic— controlling costs by selectively reopening facilities, improving its balance sheet and delivering record margins.”
9. DraftKings Inc. (NASDAQ:DKNG)
Number of Hedge Fund Holders: 26
DraftKings Inc. (NASDAQ:DKNG) suffered a lot in the face of the pandemic, reaching $12.49 per share in March 2020. However, the stock has rebounded, gaining 25.97% in the past year. DraftKings Inc. (NASDAQ:DKNG) is an American sports betting operator.
In October, Citigroup initiated its coverage on DraftKings Inc. (NASDAQ:DKNG) with a Buy rating and a $66 price target. The firm’s analyst expects the company to offer long-term growth to investors because of the growing iGaming market. In Q2, DraftKings Inc. (NASDAQ:DKNG) reported revenue of $298 million, up 320% from the prior-year quarter.
At the end of Q2, 26 hedge funds tracked by Insider Monkey reported having stakes in DraftKings Inc. (NASDAQ:DKNG).
Carillon Tower Advisers mentioned DraftKings Inc. (NASDAQ:DKNG) in its Q2 2021 investor letter. Here is what the firm has to say:
“DraftKings is a digital sports entertainment and gaming company that provides online and retail sports wagering, online daily fantasy contests, and online casino games. The firm’s quarterly results were highlighted by much better than expected revenues, although profitability metrics did not top expectations by the same magnitude. The stock has been under pressure with investors digesting continued financial losses as DraftKings invests in new jurisdictions. In addition, late in the quarter the company was the subject of a short report alleging questionable activities involved with an acquisition. We sold the stock.”
8. Melco Resorts & Entertainment Limited (NASDAQ:MLCO)
Number of Hedge Fund Holders: 29
Melco Resorts & Entertainment Limited (NASDAQ:MLCO) operates resorts with casino gaming facilities in Asia and Europe. The company reported a 222% growth in its revenue in Q2 2021, at $566.7 million.
At the end of Q2, 29 hedge funds in Insider Monkey’s database were bullish on Melco Resorts & Entertainment Limited (NASDAQ:MLCO), the same as in the previous quarter. The total value of these stakes is $755 million, compared with $728.3 million in Q1.
This September, Citigroup set a $14.5 price target on Melco Resorts & Entertainment Limited (NASDAQ:MLCO), with a Buy rating on the shares, highlighting a 32% growth in Macau gaming revenue in September.
7. Churchill Downs Incorporated (NASDAQ:CHDN)
Number of Hedge Fund Holders: 35
In Q2 2021, Churchill Downs Incorporated (NASDAQ:CHDN) presented a positive hedge fund sentiment, as 35 hedge funds tracked by Insider Monkey reported owning stakes in the company, up from 19 in the previous quarter. These stakes are valued at $694.2 million. With over 16 industry-leading casinos, Churchill Downs Incorporated (NASDAQ:CHDN) remains one of the largest gambling stocks of 2021.
Recently, Berenberg initiated its coverage on Churchill Downs Incorporated (NASDAQ:CHDN) with a Buy rating and a $294 price target. The firm’s analyst showed confidence in the company’s digital segment as the gaming sector recovers. In Q2, Churchill Downs Incorporated (NASDAQ:CHDN) posted an EPS of $3.08, beating the estimates by $0.44. The company’s revenue also presented a 178.3% year-over-year growth at $515 million.
6. Boyd Gaming Corporation (NYSE:BYD)
Number of Hedge Fund Holders: 36
Boyd Gaming Corporation (NYSE:BYD) announced its Q3 results on October 26, with an EPS of $1.30 beating the estimates by $0.04. Boyd Gaming Corporation (NYSE:BYD) reported revenue of $846 million, up from $652.2 million during the same period last year.
Boyd Gaming Corporation (NYSE:BYD) is an American gaming and hospitality company. The number of hedge funds tracked by Insider Monkey having stakes in Boyd Gaming Corporation (NYSE:BYD) grew to 36 in Q2 2021, from 22 in the previous quarter. The total value of these stakes is $534.8 million, up significantly from $299 million in Q2.
Recently, Morgan Stanley lifted its price target on Boyd Gaming Corporation (NYSE:BYD) to $90, while maintaining an Overweight rating on the shares. The firm’s analyst highlighted the company’s strong Q3 result.
Click to continue reading and see The 5 Largest Gambling Stocks of 2021.
Suggested articles:
- 15 Largest Gambling Companies In The World
- 11 Best Casino and Gambling Stocks To Buy Now
- 15 Best Gambling Stocks to Buy Now
Disclosure. None. The 10 Largest Gambling Stocks of 2021 is originally published on Insider Monkey.
