- We’re forecasting a return to negative same store revenue in the regional gaming markets following 3 straight months of gains. A monthly downturn would counter the recent regional gaming narrative and could hurt sentiment and the stocks: BYD, PENN, PNK, and GLPI
- The stocks have performed very well since we went positive on the space in January, even before GLPI’s offer to buy PNK.
- We are removing PENN from the Hedgeye Best Ideas list even though the company’s return to growth in beginning in 2H 2015 should drive a higher stock price. Our concern rests with the potential reversal in sentiment as March gaming revenues are released by the states in early April.
Early weekly revenue read from a few markets is mixed as a much weaker Pennsylvania was offset by a stronger Missouri.
Takeaway: We continue to like PENN over the intermediate and long term but negative same store revs in March could pressure regional gaming stocks