Your definition of a blue-chip stock improvements more than time. When I was youthful, United States Steel (NYSE:X) was regarded as a blue-chip financial commitment. Right now, some youthful investors could consider Penn Countrywide (NASDAQ:PENN) stock is a blue chip.
At 66, I’m seeking for continuous dividend cash flow. I never have to look at headlines relating to my holdings. If I ended up a 36-year-aged gambler or “bro,” on the other hand, I would be hunting for motion, I could possibly be wondering of the stock industry as a big on line casino.
For gamblers, PENN inventory is the perform that justifies their sneering at me. Penn Nationwide is a gaming inventory, with tiny casinos around the nation. It is receiving a good deal of participate in in online betting, and in on line athletics betting as that gets to be authorized.
Its order of a stake in Barstool Athletics, a tout web page, just prior to the lockdowns strike has manufactured it the belle of the market ball.
But PENN stock is a momentum engage in. Its financial effects don’t make a difference. What issues is the working day-by-working day look at of Penn’s marketplace and options. How massive may on the net gaming get? How major will on line sports activities betting get? How substantially of the action could Penn Nationwide consider?
Speculation all-around this long term has manufactured PENN inventory into what analysts contact a “10-bagger,” a stock whose value has risen by a component of 10 in a short time. Considering the fact that final St. Patrick’s Day, Penn National shares are up 1,357%. Right until a recent sell-off they ended up up a staggering 1,500% in a lot less than a yr. If you disregarded what I wrote a year in the past and place $1,000 into Penn stock, you have $13,357.
The shares at last started hitting headwinds in early February. On March 5 they traded beneath $110. On March 15 they had been back again in close proximity to $140 once again. Now they are at $117. At that stage you are still chatting about a market place cap of $18.3 billion, on 2020 income of under $3.6 billion.
The volatility is also attractive to those who like to engage in Penn inventory.
It’s All in the Video game
Gambling is hot now. The S&P 500 will quickly welcome PENN inventory to its ranks, along with Caesar’s Leisure (NYSE:CZR), which I consider is a much better guess. Goldman Sachs (NYSE:GS) even advisable Penn Countrywide in January. Due to the fact then, it is up 32%.
If you rode Penn Nationwide to the heights, Television analyst Jim Cramer needs you to get anything off the table. Which is the way it is with momentum stocks. Purchase when people are down on them, market when they’re jogging scorching. That is how pros like Stanley Druckenmiller, who lately bought some Penn Countrywide shares, participate in it.
Penn Nationwide management is acting like the momentum is a extensive-phrase transfer. The organization turned its expenditure in Barstool into an application it can roll out condition-by-point out as it gets to be lawful. CEO Jay Snowden phone calls Penn an “omnichannel company of retail and on the internet gaming and athletics betting.” That usually means having any action, anytime, from any where. The corporation is opening a new casino in Morgantown, Pennsylvania and moving to get into the New York sports betting motion.
The Bottom Line
Penn Countrywide stock will stay risky. Ideal now, on line gaming seems far more interesting than the casino organization. Penn is really worth 22% more than Wynn Resorts (NASDAQ:WYNN), a massive physical on line casino player in both of those the U.S. and China. It is value pretty much as a great deal as Caesar’s and MGM Resorts Global (NYSE:MGM), both of those with a even bigger bodily and on the net footprint.
I have no complaints about Barstool Sporting activities founder Dave Portnoy, who is now value $120 million thanks to his partnership with previous Fox (NASDAQ:FOX) government Peter Chernin. Score one particular for the bros.
I just really don’t assume his name and popularity are really worth the cash the bros are putting on them today. But that’s what will make horse racing. Confirm me completely wrong.
At the time of publication, Dana Blankenhorn owned no shares, right or indirectly, in any businesses pointed out in this posting.
Dana Blankenhorn has been a economical and technologies journalist since 1978. He is the author of Technology’s Major Bang: Yesterday, Now and Tomorrow with Moore’s Regulation, readily available at the Amazon Kindle store. Publish him at [email protected], tweet him at @danablankenhorn, or subscribe to his Substack https://danafblankenhorn.substack.com/.