Casino Stock Higher on Reports of Hedge Fund's Push for Sale

HG Vora Capital has allegedly built a stake in CZR

Managing Editor
Sep 13, 2018 at 9:57 AM
facebook twitter linkedin


The Coca-Cola Co
The Coca-Cola Co
The Coca-Cola Co
The Coca-Cola Co
The Coca-Cola Co

Shares of casino stock Caesars Entertainment Corporation (NASDAQ:CZR) were volatile in pre-market action, and are higher in early trading, amid reports that an activist hedge fund could be pushing for a sale. Specifically, the New York Post said HG Vora Capital has been building a stake in Caesars, and is pushing for the divestiture of assets or a sale of the company. At last check, CZR stock is up 1.5% at $10.50.

Caesars stock has shed 18% in 2018, and on Aug. 1 suffered a massive post-earnings plunge. Since touching an annual low of $8.55 that day, the stock has recovered roughly 23%, but its gains have been capped by the 50-day moving average. 

Despite the stock's technical underperformance, analyst sentiment on the casino name is mostly optimistic. Of the seven brokerage firms in coverage, six sport a "strong buy" rating on CZR, while its average 12-month price target of $13.78 stands at a 33% premium to current levels.

On the other hand, short interest soared 22.3% during the past two reporting periods, and now represents a whopping 66.4% of the stock's total available float. At CZR's average daily trading volume, it would take shorts just about four days to buy back their bearish bets.

 

If you are not making money with options, you aren’t buying options like this…

There is no options strategy that more perfectly approaches trading the fastest moving and most volatile stocks available in the marketplace than this one. In fact, there is no strategy that better utilizes put options for optimal returns and a real trading edge over other traders in the exact same market. New options traders fail out at an incredible rate without proper trade research, execution timing, and option picking. Capitalize on Schaeffer’s 100+ years of options trading excellence with the most coveted product launch in company history. Don't waste another second... join us right now before the next round of trades are released!

Schaeffer's Investment Research Master Portfolio Trial
 


 


 
Special Offers from Schaeffer's Trading Partners