PENN/REGIONAL GAMING: MARCH PAUSE

Takeaway: We continue to like PENN over the intermediate and long term but negative same store revs in March could pressure regional gaming stocks

  • 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. 

PENN/REGIONAL GAMING: MARCH PAUSE - FF


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