Insider Activity Report: Penn Entertainment (PENN)

Felicia Hendrix, CFO at Penn Entertainment (PENN), recently bought 11,162 shares. The buy increased her stake by 66 percent, and came to a total cost of $250,140.

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  • The buy comes a few weeks after a director bought 20,000 shares in August, paying just over $453,000 to do so. Otherwise, two directors sold shares earlier in the year, with one of those sales coming from an options exercise.

    Overall, company insiders own 0.8 percent of shares.

    The casino and sports content company is down about 32 percent over the past year. Earnings have doubled, despite just a 3 percent increase in revenues.

    However, investors are concerned about slowing spending, and the company’s high debt load following its purchase of Barstool Sports.

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  • Shares are trading for 20 times forward earnings, but for just 0.6 times their price to sales and 0.8 times their book value.

    Action to take: Shares are inexpensive on a valuation basis, and there appears to be more than enough cash flow to accommodate the company’s current debt load. Investors may want to buy some shares now, and use any further weakness to add to that position.

    For traders, shares are trending lower, but the rate is slowing. That could set the stock up for a long-term move higher in the coming months. The January 2025 $25 calls, last going for about $4.60, could see high-double-digit gains or better in the next 16 months before expiration on such a rally higher.

     

    Disclosure: The author of this article has no position in the company mentioned here, and does not intend to trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.

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