Analyst: This Casino Stock is a 'Golden Opportunity'

Short sellers have been ramping up their exposure to GDEN

Karee Venema

Oct 5, 2018 at 2:37 PM

GDEN

Deutsche Bank initiated coverage on Golden Entertainment Inc (NASDAQ:GDEN) with a "buy" rating and $40 price target -- a 64% premium to the stock's current trading price. The brokerage firm said the Las Vegas-based casino name is a "golden opportunity hiding in plain sight," and waxed optimistic on potential for growth. GDEN stock initially gapped 5.8% higher at the open, but was last seen trading down 4.5% at $24.38.

Broadening the scope, the shares of GDEN climbed all the way up to $34.45 in mid-July -- coming within a chip-shot of their December record high of $34.75 -- but have since shed 29%. More recently, the stock breached long-term support atop its 320-day moving average, with this trendline keeping a tight lid on September rally attempts.

gden stock chart on oct 5

Nevertheless, all the analysts covering Golden Entertainment echo Deutsche Bank's upbeat outlook, with each maintaining a "strong buy" rating. Plus, the average 12-month price target sits all the way up at $39.25.

Short sellers, on the other hand, have been increasing their bearish exposure to the stock. Short interest surged 22% in the most recent reporting period, to 1.77 million shares. This accounts for a healthy 10.4% of GDEN's available float, or 3.3 times the average daily pace of trading.

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