Are Smart Investors Making the Right Decision? Penn National Gaming Inc. (PENN)

Penn National Gaming Inc. (NASDAQ: PENN) stock jumped 1.16% on Friday to $36.59 against a previous-day closing price of $36.17. With 4.12 million shares changed hands, the volume of the stock remained heavier than its average volume of 4.01 million shares. During the session, the Resorts & Casinos company that operates in wider Consumer Cyclical sector, reached to the highest price of $37.15 whereas the lowest price it dropped to was $35.95. The 52-week range on PENN shows that it touched its highest point at $86.40 and its lowest point at $26.46 during that stretch. It currently has a 1-year price target of $51.44. Beta for the stock currently stands at 2.24.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of PENN was up-trending over the past week, with a rise of 6.46%, but this was up by 13.25% over a month. Three-month performance dropped to -5.04% while six-month performance fell -22.54%. The stock lost -45.13% in the past year, while it has lost -29.43% so far this year. A look at the trailing 12-month EPS for PENN yields 2.17 with Next year EPS estimates of 2.56. For the next quarter, that number is 0.54. This implies an EPS growth rate of 147.80% for this year and 37.84% for next year. EPS is expected to grow by 4.60% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 16.70%.

Float and Shares Shorts:

At present, 168.20 million PENN shares are outstanding with a float of 165.74 million shares on hand for trading. On Jul 14, 2022, short shares totaled 9.44 million, which was 5.66% higher than short shares on Jun 14, 2022. In addition to Mr. Jay A. Snowden as the firm’s Pres, CEO & Director, Ms. Felicia Rae Kantor Hendrix serves as its Exec. VP & CFO.

Institutional Ownership:

Through their ownership of 79.75% of PENN’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 46.54% of PENN, in contrast to 32.92% held by mutual funds. Shares owned by individuals account for 2.71%. As the largest shareholder in PENN with 10.46% of the stake, Fidelity Management & Research Co holds 17,449,234 shares worth 17,449,234. A second-largest stockholder of PENN, The Vanguard Group, Inc., holds 17,332,806 shares, controlling over 10.39% of the firm’s shares. BAMCO, Inc. is the third largest shareholder in PENN, holding 10,616,332 shares or 6.37% stake. With a 4.47% stake in PENN, the Fidelity Blue Chip Growth Fund is the largest stakeholder. A total of 7,455,798 shares are owned by the mutual fund manager. The Baron Growth Fund, which owns about 3.34% of PENN stock, is the second-largest Mutual Fund holder. It holds 5,566,000 shares valued at 169.32 million. Vanguard Total Stock Market Index holds 2.95% of the stake in PENN, owning 4,911,763 shares worth 149.42 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for PENN since 19 analysts follow the stock currently. There are 12 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 5 believe that the stock is worth HOLDING, 2 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With PENN analysts setting a high price target of $80.00 and a low target of $37.00, the average target price over the next 12 months is $51.76. Based on these targets, PENN could surge 118.64% to reach the target high and rise by 1.12% to reach the target low. Reaching the average price target will result in a growth of 41.46% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. PENN will report FY 2022 earnings on 02/02/2023. Analysts have provided yearly estimates in a range of $3.11 being high and $1.18 being low. For PENN, this leads to a yearly average estimate of $1.75. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Penn National Gaming Inc. surprised analysts by -$0.14 when it reported $0.29 EPS against a consensus estimate of $0.43. The surprise factor in the prior quarter was -$0.26. Based on analyst estimates, the high estimate for the next quarter is $0.69 and the low estimate is $0.30. The average estimate for the next quarter is thus $0.50.

Summary of Insider Activity:

Insiders traded PENN stock several times over the past three months with 0 Buys and 0 Sells. In these transactions, 0 shares were bought while 0 shares were sold. The number of buy transactions has increased to 49 while that of sell transactions has risen to 25 over the past year. The total number of shares bought during that period was 376,185 while 312,182 shares were sold.

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