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Sports Betting Expansion Makes Penn National Gaming a Strong Buy

Investors have been distracted by election-related issues, but there’s a hidden winner amidst the confusion. I’m referring to Penn National Gaming (NASDAQ:PENN). But, how exactly are PENN stock holders winning?

Penn (PENN) National Gaming logo on the website homepage.
Source: Casimiro PT / Shutterstock.com

Overall, the company — which owns gaming and racing properties and machines, as well as a stake in sports betting and media platform Barstool Sports — looks good. The PENN stock price appears to be perking up, but that’s not the whole story. It’s understandable if the shareholders want a reason to hold PENN into 2021. After all, we’re living in a tumultuous time with the novel coronavirus pandemic still being a major factor.

Fortunately, PENN stock shareholders just got an election-time boost of confidence. Don’t misread this. It’s not about one presidential candidate or the other. Rather, it’s about the voters in multiple states expressing their support of legalized gaming.

You might call it a “green wave” because it’s a groundswell of support for the massively lucrative gambling market. By watching the pro-gaming movement expand into more and more regions, traders can sidestep the election-time controversy and confusion and instead focus on a hyper-growth industry in the making.

PENN Stock at a Glance

The rocket ride in PENN stock commenced in March, just as the coronavirus crash was bottoming out. Watching PENN touch the 52-week low of $3.75 was undoubtedly gut-wrenching for investors.

This proved to be a lesson in the importance of not panicking, however. Within a matter of months, PENN stock ascended all the way up to $76.62. After that, it appears that some profit taking occurred and the share price dipped.

Dips aren’t necessarily a bad thing, though. When the PENN stock price slid in late October, this was a chance to own the shares at a more favorable price point.

And as the early November elections began, loyal PENN stock holders would enjoy a quick spike in the price. This begs the question of what event could have possibly caused this encouraging share-price move.

Sports-Betting Sweep

On Nov. 4, shares of PENN stock gained 6.55%. Even for a stock that’s known to make sizable moves, this was a substantial single-session surge.

Was it related to an event specific to Penn National Gaming? Not really. Instead, the price move was precipitated by multiple events that took place across a number of U.S. states, and which would benefit the gaming industry as a whole.

A number of states and cities had measures on their ballots concerning land-based gambling and casino legislation. That said, PENN stock investors should be glad to know that the results were largely favorable for the gaming market.

The question of legalizing sports betting was posed to voters in three states: Louisiana, Maryland and South Dakota. Call it a clean sweep or a “green wave” if you’d like as voters said yes in all three of those states.

More Than Half

So, we can now add three more states to the running total of U.S. states that allow some form of legalizing sports betting. With this, the nation is now up to 25 states and Washington D.C. allowing this type of gambling — that’s more than half of the country.

Barry Jonas, senior equity analyst at Truist Securities, suggests that the sports betting rollout won’t happen all at once in the aforementioned three states. For example, there will likely be challenges in Louisiana pertaining to the taxing, licensing and regulation of sports betting.

In South Dakota, Jonas expects to see sports betting commence at retail locations. As for mobile sports betting, this could commence “down the road.”

The process might also take a while in Maryland, where the election result “is just the first step in a long process where there will need to be additional legislation on everything else for the state to actually have sport betting,” Jonas explains.

So, PENN investors shouldn’t necessarily expect a massive run-up in the share price. Still, there’s progress afoot for PENN shareholders as the majority of U.S. states have at least made it legal to engage in sports betting.

The Takeaway on PENN Stock

Overall, there’s no need to let a confusing election distract you from a ripe opportunity in the American gambling market. With sports betting now legalized in three more U.S. states, the bull thesis for PENN stock is stronger than ever.

On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.

Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system —with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation.

Article printed from InvestorPlace Media, https://investorplace.com/2020/11/sports-betting-expansion-makes-penn-stock-a-strong-buy/.

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