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

HG Vora Capital has allegedly built a stake in CZR

Emma Duncan

Managing Editor

Sep 13, 2018 at 9:57 AM

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.

Follow @Schaeffers

The $25k Day Trading Barrier is Gone. It's Time to Put Your Capital to Work.

For years, the PDT rule put a major roadblock in front of active traders. The barrier is no longer standing in the way.

But having more freedom doesn't mean every trade is worth taking.

With Dynamite Day Trading Signals, you'll receive up to 2 options trade alerts per week, each targeting 50%+ gains in a single session.

NO holding positions overnight.

NO waiting weeks for a trade to develop.

Just focused options trades designed to capitalize on opportunities as they emerge.

👉 Get Access to Dynamite Day Trading Signals