Penn National Gaming: Exiting the Penn-alty Box

Shawn Kravetz presented his in-depth investment thesis on Penn National Gaming (Nasdaq: PENN) at Best Ideas 2017.

Penn National Gaming is a leading operator of regional casinos in North America. Having spent 2016 in the “PENN-alty” box due to a series of unforced errors, PENN shares fell ~14% in 2016 while their peer group rallied ~40%. Shawn believes investors win in 2017 thanks to a “royal flush” of catalysts for the shares, which trade at an undemanding 7.3x TEV/EBITDA multiple (still a meaningful discount to peers) and a ~20% FCF yield. Shawn believes PENN shares are worth 40-100% more than recent market prices, subject in part to how the company allocates its expected $600-750 million in expected FCF over the next three years.

About the instructor:

Shawn W. Kravetz is the Founder, Chief Investment Officer, President and Portfolio Manager at Esplanade Capital. Prior to founding Esplanade Capital, Mr. Kravetz was a Principal at the Parthenon Group. Prior to Parthenon, Mr. Kravetz was the Director of Strategic Planning and Corporate Development at CML Group. His experience also includes work at Monitor Company and the Sara Lee Corporation. Mr. Kravetz serves as a Member of Advisory Board at Torque Partners LLC. He has been a Director of Nevada Gold & Casinos Inc. since October 13, 2016. He holds an M.B.A. with high distinction from Harvard Business School, where he received the following honors: Baker Scholar, The Thomas M. and Edna E. Wolfe Award for “Scholastic Excellence and Attainment”, and “The Henry Ford II Scholar Award” for “The Student with the Best First Year Record”. Mr. Kravetz holds a B.A. in Economics from Harvard College, where he graduated magna cum laude.

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