Baron Funds, an investment management company, released its “Baron Real Estate Fund” first quarter 2023 investor letter. A copy of the same can be downloaded here. In the first quarter, the fund rose 7.07% (Institutional Shares) compared to a 2.39% return for the MSCI US REIT Index (the “REIT Index”) and a 4.73% return for the MSCI USA IMI Extended Real Estate Index (the “MSCI Real Estate Index”). The firm is optimistic about the prospects for the stock market, public real estate securities, and the fund. In addition, please check the fund’s top five holdings to know its best picks in 2023.
Baron Real Estate Fund highlighted stocks like Caesars Entertainment, Inc. (NASDAQ:CZR) in the first quarter 2023 investor letter. Headquartered in Reno, Nevada, Caesars Entertainment, Inc. (NASDAQ:CZR) is a gaming and hospitality company. On June 27, 2023, Caesars Entertainment, Inc. (NASDAQ:CZR) stock closed at $48.27 per share. One-month return of Caesars Entertainment, Inc. (NASDAQ:CZR) was 17.70%, and its shares gained 19.87% of their value over the last 52 weeks. Caesars Entertainment, Inc. (NASDAQ:CZR) has a market capitalization of $10.388 billion.
Baron Real Estate Fund made the following comment about Caesars Entertainment, Inc. (NASDAQ:CZR) in its first quarter 2023 investor letter:
“Following a 50% decline in its share price in 2022, we re-acquired shares of Caesars Entertainment, Inc. (NASDAQ:CZR) in the first quarter. Caesars is the largest casino-entertainment company in the U.S. and one of the world’s most diversified casino-entertainment providers. The company operates primarily under the Caesars, Harrah’s, Horseshoe, and Eldorado brand names. The company generates approximately 50% of its cash flow from Las Vegas and 50% of its cash flow from regional destination markets. The company owns approximately half of its real estate and leases the other half from gaming REIT companies – Gaming and Leisure Properties, Inc. and VICI Properties Inc.
We recently met with CEO Tom Reeg, who we hold in high regard. Tom has a long and impressive track record of synergistic acquisitions, maximizing the value of casino and gaming companies, and deleveraging. Most recently, since acquiring Caesars in 2019, Tom and his management have implemented operational improvements that have led to an increase in cash flow (EBITDA) from $2.9 billion to more than $4 billion on a similar revenue base of approximately $11 billion.
We are optimistic about the long-term prospects for Caesars for the following reasons:
We are optimistic about the long-term prospects for Las Vegas and Las Vegas represents approximately 50% of Caesars’ cash flow: Near term, we expect the Las Vegas Strip to generate strong cash-flow growth in 2023 reflecting an improvement in business group and convention activity, international visitation, and various events throughout the year that should attract large crowds including a Formula 1 racing event that will occur in Las Vegas in November 2023. We believe that Las Vegas has structurally changed and has a year-round business and event calendar that has effectively eliminated off-peak months or lulls in business activity…” (Click here to read the full text)
Photo by Michal Dolnik on Unsplash
Caesars Entertainment, Inc. (NASDAQ:CZR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 56 hedge fund portfolios held Caesars Entertainment, Inc. (NASDAQ:CZR) at the end of first quarter 2023 which was 61 in the previous quarter.
We discussed Caesars Entertainment, Inc. (NASDAQ:CZR) in another article and shared the list of mid-cap stocks that insiders have been buying lately. In addition, please check out our hedge fund investor letters Q1 2023 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
