Penn National a buyer in world of sellers
Morgan Joseph gaming analyst Justin Sebastiano is now a member of the Penn National Gaming fan club.
As gaming companies falter, Penn National is viewed by most Wall Street researchers as an industry anomaly, a casino operator with a strong balance sheet that is flush with cash. That makes Penn National a buyer in a world of sellers.
The company has $1.475 billion sitting on the books, the result of an aborted private equity buyout effort. The company was reportedly close to buying The Mirage earlier this year but backed off when MGM Mirage wanted more than the company was offering.t
Name a potential casino sale opportunity on the Strip, and Penn National will be listed as a potential buyer.
“We think Penn has the financial flexibility to weather the current economic storm and simultaneously pursue avenues of growth,” Sebastiano wrote this week as he initiated coverage in the company.
He said Penn National’s stock, which closed Tuesday at $19.59, up $2.41 or 14.03 percent on the Nasdaq National Market, is worth $25 a share.
“The conservative multiple being afforded Penn shares is more an indictment of the gaming industry rather than a specific issue with Penn’s operations,” Sebastiano said.
