PENN: ADDING TO BEST IDEAS

Takeaway: A true growth story in regional gaming, finally, ripe with catalysts, same store and new unit growth, and accelerating cash flow

A CALL TO ACTION

We’re adding PENN to the Hedgeye Best Ideas list as a long.  We see stability in regional gaming revenues over the next several months providing some much needed earnings visibility.  PENN maintains the best new unit growth story in domestic gaming with the opening of the Plainridge casino in Massachusetts in June and the Jamul casino in Q2 2016.  Both properties should well exceed current Street estimates for win per slot and EBITDA.  PENN has a proven track record as the best regional casino operator and recently proved its prowess at successfully opening racinos (casinos at racetracks) with estimate beating Dayton and Mahoning commencing slot operations last year.

 

The upshot: if we're close to being right on our significantly higher 2015 and 2016 EPS projections ($0.60 vs $0.47 and $1.00 vs $0.74, respectively), PENN has a lot of upside.

 

PENN: ADDING TO BEST IDEAS - 6 1 2015 6 57 09 AM