|Bid||19.50 x 800|
|Ask||0.00 x 1100|
|Day's Range||18.40 - 21.53|
|52 Week Range||8.82 - 21.53|
|Beta (5Y Monthly)||N/A|
|PE Ratio (TTM)||N/A|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||N/A|
Gambling stocks have been on fire since March’s novel coronavirus crash. When the pandemic first hit, investors feared the worst for the gaming sector. But, with social distancing having less impact than expected — along with the continued sports-betting megatrend — names in this industry made a tremendous recovery. However, as Covid-19 cases begin to surge once again, will gaming stocks give up some of their luck? Or, with the possibility of a vaccine just around the corner, does this winning sector still have room to run? All bets are off. Although a vaccine could help put the pandemic in the rearview mirror, these next few months could bring a second round of lockdowns that hurt this industry significantly.InvestorPlace - Stock Market News, Stock Advice & Trading Tips That being said, there may still be an opportunity here. Investors can buy online-based names in anticipation of more lockdowns, or snatch up the land-based names as their share prices potentially pull back in the near-term. 10 Best Stocks to Buy for Investors Under 30 So, which gambling stocks should you consider? Keep these names on your watchlist: Caesars Entertainment (NASDAQ:CZR) DraftKings (NASDAQ:DKNG) Landcadia Holdings II (NASDAQ:LCA) Las Vegas Sands (NYSE:LVS) MGM Resorts (NYSE:MGM) Gambling Stocks to Buy: Caesars Entertainment (CZR) Source: Jason Patrick Ross/Shutterstock.com First on my list of gambling stocks is the new Caesars Entertainment. As InvestorPlace contributor Vince Martin noted on Nov. 6, this company is the post-merge name after Eldorado Resorts acquired the gambling giant earlier this year. While that deal may have looked ill-timed in hindsight, it could still pay off for investors. Given that the company took on significant debt to acquire its larger rival — thanks to the high leverage — an ounce of improvement could put a lot of points into CZR stock in the coming years. Sure, with Nevada responding to the outbreak surge by reducing capacity in casinos down to 25%, investors could also be in for another bumpy ride. But a return to normal for land-based casinos isn’t the only catalyst for CZR stock. If its pending deal to buy William Hill (OTCMKTS:WIMHY) closes, this company could quickly catch up to its rivals like MGM and Penn National (NASDAQ:PENN). So, what’s the call? After bouncing back close to its pre-pandemic price levels, we could see Caesars sell off once again. But — given the factors in its favor — you should consider any weakness as a buying opportunity. DraftKings (DKNG) Source: Lori Butcher / Shutterstock.com Profitability may be years away for DraftKings, my next pick of the gambling stocks. What’s more, at today’s valuation, much of its potential is already priced into the shares. However, there may still be a bull case for investing in DKNG stock at today’s price of around $48. Why should you consider buying DraftKings now? Firstly, because of the continued sports-betting legalization wave. As more states legalize online sportsbooks, this first mover in the industry is poised to gain significant market share in the coming years. Of course, the company’s first mover status doesn’t guarantee its domination in the industry. Not only does DraftKings face competition from land-based casinos, it’s also competing against global wagering giants like Flutter Entertainment (OTCMKTS:PDYPY) and Pointsbet Holdings (OTCMKTS:PBTHF). But while DraftKings is far from the only game in town, it doesn’t have to crush the competition in order to crush it in the growth department. As seen in the company’s recent earnings report, DKNG continues to exceed Wall Street expectations. 7 Value Stocks That May Come Back into Style After the Pandemic Bottom line? At first glance, it may look like shares have gotten ahead of themselves, but this stock could continue climbing both in the near- and long-term. Landcadia Holdings II (LCA) Source: Stokkete/ShutterStock.com In recent weeks, investors have had mixed feelings about this special acquisition company (SPAC). Lancadia is set to complete its deal with Golden Nugget Online Gaming (owned by Fertitta Entertainment) soon. And, while’s there’s a bull case to be made, it’s understandable why some are concerned this iGaming play will fail to live up to expectations. Sure, it’s questionable whether this company — which has done well in the New Jersey market — can find the same levels of success in other states. On top of that, the suspected motivations behind the deal are also reason for concern with LCA stock. If billionaire Tilman Fertitta — the principal on both sides of the deal — is looking to cash out, do you really want to be buying in? Nevertheless, risk-return is fully in your favor here, with today’s prices at around $16 per share. Yes, the shares are richly priced and could crash if speculation in online gambling stocks subsides. But — even if this company winds up with just a sliver of the market — that could be enough to send shares materially above where they are today. Keep in mind, this is a high-risk, high-potential return opportunity. In other words, don’t bet the ranch. But with the potential to soar in the near future, consider it a cautious buy at current price levels. Las Vegas Sands (LVS) Source: Andy Borysowski / Shutterstock.com With most of its operations based in Macau, Las Vegas Sands was one of the first gambling stocks hit badly by the pandemic. However — with signs that the Chinese gaming market is starting to recover — there may be a great opportunity in this casino operator that has its fortunes largely tied to Asia. Why? While both are diversified geographically, Caesars and MGM are still heavily bound to the health of Las Vegas. But Las Vegas Sands? Don’t let the name fool you — Vegas only made up less than 15% of its revenue in 2019. As such, LVS stock was and is primarily a play on the health of Asia’s gambling sector. Sure, a Macau recovery is still a work-in-progress. But with China avoiding a second wave, gaming in that part of the world could continue to recover. On the other hand, in-person casinos in the United States are stumbling again as stringent lockdown and social distancing orders come back into effect. 7 Cybersecurity Stocks To Buy For Defense Against The Dark Web What does this mean for LVS stock? Shares — which trade for at almost $57 today — could continue to climb back towards their pre-pandemic prices above $70. Tread carefully, but this name remains a buy after recovering more than 70% off its March lows. MGM Resorts (MGM) Source: Michael Neil Thomas / Shutterstock.com With Nevada cutting casino capacity on the heels of surging Covid-19 cases, now may not look like the time to dive into Vegas-centric casino names like MGM stock. However — while the upcoming winter could mean more tough times — any big selloff in the near-term may give you a solid entry point for a long-term position. Why buy if shares take a dive? Shares may have prematurely rallied on the positive vaccine news earlier this month. But, while it may be a few months until the vaccine is readily available, the stock will likely bounce back as investors look to a full recovery in 2021. Additionally, this land-based casino operator gives you solid exposure to the online gaming megatrend. The performance of BetMGM — the company’s online gambling joint venture with GVC Holdings (OTCMKTS:GMVHF) — has handily beat expectations. Granted, this unit isn’t large enough yet to counter any near-term declines in MGM’s brick-and-mortar properties. But it could minimize how much this stock falls if the pandemic worsens during the winter. Just a few dollars below its pre-pandemic prices, shares may not be a screaming buy right now at around $28. However, investors should consider this pick of the gambling stocks as a solid opportunity for future gains. In short, keep an eye out for any big pullback. On the date of publication, Thomas Niel did not (either directly or indirectly) hold any positions in the securities mentioned in this article. Thomas Niel, a contributor to InvestorPlace, has written single stock analysis since 2016. More From InvestorPlace Why Everyone Is Investing in 5G All WRONG Top Stock Picker Reveals His Next 1,000% Winner Radical New Battery Could Dismantle Oil Markets The post Place Your Bets on Black with These 5 Gambling Stocks appeared first on InvestorPlace.
Landcadia Holdings II (NASDAQ:LCA) now expects to close its merger with Golden Nugget Online Gaming by the end of November. This news will be a catalyst for LCA stock, which will start trading under the symbol “GNOG” after the merger is completed. Source: Stokkete/ShutterStock.com This new timeline was announced by Landcadia and Golden Nugget on Nov. 5 in an SEC filing. In the filing, the company also said it had won two online-gaming industry awards Moreover, Golden Nugget Online Gaming said that its gross gaming revenue had jumped 72% in the first nine months of 2020. And it said that it had taken in over $2 billion of bets.InvestorPlace - Stock Market News, Stock Advice & Trading Tips The Outlook for Golden Nugget Online Gaming If Golden Nugget continues to post those kinds of results, LCA stock is going to be a huge success once its merger closes, as it will receive additional funds through the deal. The firm will become only the second, pure publicly traded online casino company in the U.S. DraftKings (NASDAQ:DKNG) is the other. 7 Telehealth Stocks To Buy Ahead Of Flu Season And when the merger was announced on June 29, Landcadia had $321 million of funds that will be transferred to Golden Nugget after the merge. Golden Nugget will likely be able to use those funds to pay down some of its debt. In addition, it will launch online gaming in other states, starting with Michigan. Moreover, the company recently reported that its online net revenue had jumped 92% year-over-year and 4% versus Q2 to $25.9 million. Further, its operating income jumped 92% YOY to $8.2 million. However, its Q3 operating income fell by $300,000 versus Q2. The Outlook of LCA Stock As I suggested in my last article, Golden Nugget will likely do quite well after its merger closes at the end of November. DraftKings’ stock doubled from the time when its merger with a SPAC was announced until it closed. However, as I pointed out in my Sept. article, Golden Nugget Online has been much more profitable than DraftKings. I also reported last month that Golden Nugget Online had disclosed an interesting issue that may have delayed the closing of the merger. Specifically, there were some last-minute negotiations between Landcadia and Golden Nugget’s owner, Tilman J. Fertitta, who will be the controlling shareholder of the merged company. An amendment was made to the purchase agreement to limit Fertitta’s control over the combined company. That restriction would be implemented only if he and the entities he controls end up having less than a 30% stake in the company. This change is good for shareholders because it protects them from a scenario in which Fertitta reduces his stake and yet can still control the board. It also indicates that Landcadia believes that LCA stock could shoot up after the merger, making selling his stock attractive. They foresaw this scenario developing with a bad outcome. In effect, this is a bullish sign for the stock. What To Do With LCA Stock So far there are no forecasts for LCA stock, nor GNOG since it is not trading under that symbol yet. So, I would suspect that on Nov. 30 or shortly thereafter some sell-side analysts will produce their forecasts. As I have above, however, I suspect that the stock will continue to do quite well. One way to take advantage of this is to buy the in-the-money warrants for LCA stock. Those trade under the symbol LCAHW (with NASDAQ). They are currently trading around $3.96 per warrant. I wrote an extensive gallery article which explains how in-the-money warrants work for SPAC stocks. The exercise price is $11.50 per warrant. Therefore, when LCA stock trades at $13.60, they are in-the-money (i.e., the intrinsic value) by $2.10 (i.e., $13.60 minus $11.50). The extra $1.86 per warrant that is above the intrinsic value is what you pay to own the warrant over the 5-year exercise period. However, there is a problem, as described in my article. Any warrant for an underlying SPAC merger stock which trades above $18 will likely get called by the company. The company could subsequently buy back the warrant for 1 cent. The bottom line is that it is usually better to buy these in-the-money warrants prior to the merger closing. This is because the extra amount you pay over the intrinsic value will evaporate if and when the stock rises after the merger closes. The bottom line is that I suspect that this stock will do extremely well over the next year. On the date of publication, Mark R. Hake did not have (either directly or indirectly) any positions in any of the securities mentioned in this article. Mark Hake runs the Total Yield Value Guide which you can review here. More From InvestorPlace Why Everyone Is Investing in 5G All WRONG Top Stock Picker Reveals His Next 1,000% Winner Radical New Battery Could Dismantle Oil Markets The post Golden Nugget Online Could Jump When Its Merger Closes with Landcadia appeared first on InvestorPlace.
A Nov. 9 press release from Pennsylvania-based mergers and acquisition litigation specialist Brodsky & Smith LLC caught my attention. It centers around the pending merger between special purpose acquisition company Landcadia Holdings II (NASDAQ:LCA) and Golden Nugget Online Gaming Inc. If you own LCA stock, you might want to reconsider your position. Source: rawf8/Shutterstock.com Here’s why. LCA Stock and Obvious Self-Dealing Having written about investments for over a decade, I’ve become immune to the press releases issued by law firms looking for enough investors to sign on to a class-action lawsuit to get it certified in the courts.InvestorPlace - Stock Market News, Stock Advice & Trading Tips 7 Retail Stocks That Will Benefit From 2020’s Holiday Shopping Season However, there’s big money to be made from these lawsuits. And sometimes they’re even justified. Brodsky & Smith’s press release laid out why it is seeking investors to come forward. “[I]t is investigating potential claims against the Board of Directors of Landcadia Holdings II, Inc. (“Landcadia” or the “Company”) (Nasdaq:LCA) for possible breaches of fiduciary duty and other violations of federal and state law in connection with recent corporate actions, including the Company’s Purchase Agreement to acquire Golden Nugget Online Gaming, Inc. (“Golden Nugget”), a US online real money casino owned by Tilman Fertitta,” the press release states. In a nutshell, the law firm is investigating whether billionaire Tilman Fertitta was self-dealing when Fertitta Entertainment — controlled by Fertitta and a sponsor of the SPAC — entered into a merger agreement with online operations of the Golden Nugget casino, also controlled by Fertitta. It should seem pretty darn obvious that’s what was happening in this instance, but it doesn’t necessarily make it improper. If investors chose to pony up capital to Landcadia Holdings II — it raised $275 million in May 2019 — when they knew full well that Fertitta was chief executive and in charge of the management team searching for a combination target, they also should have realized that a target such as Golden Nugget’s online gaming operations wasn’t outside the realm of possibility. “While we may pursue an initial business combination target in any industry, we intend to focus our search on investment opportunities in the consumer, dining, hospitality, entertainment and gaming industries, including technology companies operating in these industries,” stated its IPO prospectus. Two words: Technology and gaming. These should have been a big tip-off. And then there was the financial condition of Fertitta’s empire. The Billionaire Has No Clothes In September, I recommended that investors pass on LCA stock because there were better gaming opportunities among current and former SPACs. One particular concern with Fertitta’s involvement in the SPAC is that the billionaire’s financial well-being has been in question ever since leveraging big time to buy the NBA’s Houston Rockets in 2017. Add in Covid-19, which has been a punch in the gut to hospitality and in-person gaming businesses, and you’ve got a motivated buyer and seller. “Fertitta, who is said to be worth $5.8 billion, is the poster child of the low-interest rate era that we find ourselves. He’s used debt to build his restaurants, hotels, and sports teams (he owns the Houston Rockets),” I wrote on Sep. 18. “In April, Fertitta’s Golden Nugget sold $250 million in debt at 15% interest to keep his empire afloat. Fansided published an article in March that questioned the billionaire’s financial wherewithal to buy the Houston Rockets in September 2017.” I suppose you could argue that Fertitta’s current predicament is nothing but unfortunate timing. To take Golden Nugget’s online gaming operations public at this point, considering the success of DraftKings (NASDAQ:DKNG), is a perfectly sensible transaction. If not Landcadia Holdings II, some other gambling-focused SPAC might have stepped forward to accommodate Fertitta’s plans. If the target’s business case is a good one — Golden Nugget’s Q3 2020 results include a 93% increase in gross gaming revenues to $28.9 million with a 92% increase in operating income to $8.2 million — and the valuation is reasonable, shareholders of record as of Oct. 29 ought to be willing to vote in favor of the combination when the special meeting to vote takes place. In the proxy materials for the special meeting, Landcadia highlights that the merged entity will have an enterprise value of $745 million or 6.1 times its estimated 2021 revenues of $122 million. DraftKings is trading at 40 times sales. Further, it’s been profitable since 2016. What’s not to like? The Bottom Line If you read the proxy materials closely, you will see that Tilman Fertitta will be chairman and CEO of Golden Nugget Online Gaming. Fertitta Entertainment and the man himself will own 52% of the company. More importantly, Fertitta gets out from under some of the debt owed to his creditors while retaining control of a profitable business. The whole thing might stink to high heaven, but it appears to be a perfectly legal maneuver. On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. Will Ashworth has written about investments full-time since 2008. Publications where he’s appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia. At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities. More From InvestorPlace Why Everyone Is Investing in 5G All WRONG Top Stock Picker Reveals His Next 1,000% Winner Radical New Battery Could Dismantle Oil Markets The post The Stench Emanating From Landcadia Holdings II Is Palpable appeared first on InvestorPlace.