U.S. Markets closed

Want to Buy Penn National Gaming (PENN) Stock? Here’s What You Need to Know

Alex Smith
·4 min read

Alger Mid Cap Focus Fund recently released its Q3 2020 Investor Letter, a copy of which you can download here. Class Z shares of the Alger Mid Cap Focus Fund outperformed the Russell Midcap Growth Index during the third quarter of 2020. You should check out Alger Mid Cap Focus Fund's top 5 stock picks for investors to buy right now, which could be the biggest winners of 2021.

In the Q3 2020 Investor Letter, Alger Mid Cap Focus Fund highlighted a few stocks and Penn National Gaming Inc (NASDAQ:PENN) is one of them. Penn National Gaming Inc (NASDAQ:PENN) is a casino company. Year-to-date, Penn National Gaming Inc (NASDAQ:PENN) stock gained 270.3% and on December 24th it had a closing price of $94.66. Here is what Alger Mid Cap Focus Fund said:

"Penn National operates 40 properties (casinos and racetracks) across 20 states. In February. Penn National purchased a 36% interest in Barstool Sports, an online sports media company with 66 million monthly active users. Penn National is using Barstool Sports as the brand of its digital strategy and retains 100% of the sports betting and online casino (iGaming) proceeds in the relationship. Traditional brick¬and-mortar casino gambling in the U.S. is not a growth industry: however, two unique growth areas exist for casino operators: online sports betting (OSB) and iGaming. More states are considering legalization of OSB and iGaming due to Covid¬19-related budget shortfalls, as gambling can raise substantial tax revenue. Importantly, data shows that sports betting and online casinos do not cannibalize brick-and-mortar casino revenues. Additionally, gaming companies must have a physical presence within the states where they seek to have online gambling and sports betting legalized, so Penn National's brick-and-mortar facilities give the company an advantage in this area. Shares of Penn National performed strongly during the third quarter in response to the company's brick-and-mortar properties recently generating higher margins compared to pre-Covid-19 levels. a result of the company cutting costs and increased customer spending. Investors also responded favorably to Barstool's September launch of its Sportsbook app in Pennsylvania. Additionally. sports betting and online gaming levels have reached record highs in numerous states."

Pixabay/Public Domain

Earlier this month, we published an article revealing that Baron Discovery Fund is bullish on Penn National Gaming Inc (NASDAQ:PENN) stock. The investment firm believes that the stronger balance sheet will allow Penn to be in a better position to invest and aggressively grow its online sports betting operations going forward.

In Q3 2020, the number of bullish hedge fund positions on Penn National Gaming Inc (NASDAQ:PENN) stock increased by about 32% from the previous quarter (see the chart here), so a number of other hedge fund managers believe in Penn's growth potential. Our calculations showed that Penn National Gaming Inc (NASDAQ:PENN) isn't ranked among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 216% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 121 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds' poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

Video: Top 5 Stocks Among Hedge Funds

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website:

Disclosure: None. This article is originally published at Insider Monkey.