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Why Penn National Gaming investors can bet on 3Q14 results

PART:
1 2 3 4 5 6 7 8 9 10 11 12 13
Part 8
Why Penn National Gaming investors can bet on 3Q14 results PART 8 OF 13

Must-know: Institutional investors dominate Penn National Gaming

Institutional investors

The proportion of U.S. public equities managed by institutions has risen steadily over the past six decades. As a result, the role and influence of institutional investors have grown over time.

This chart shows that institutional shareholders hold ~88% of Penn National Gaming, Inc. (PENN).

Must-know: Institutional investors dominate Penn National Gaming

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Insider holding

Investors should take into account any insider ownership at the company in which they’re planning to invest. If management shows confidence in the business by owning shares, it’s a signal to other investors that they should have confidence. Meanwhile, insider holding won’t prevent a company from being hurt by weak market performance and poor fundamentals.

Must-know: Institutional investors dominate Penn National Gaming

As you can see in the above chart, PENN’s Chairman, Peter M. Carlino—through Carlino Family Trust—holds an 8.6% stake in PENN and figures among the top three shareholders of the company.

Companies like Las Vegas Sands Corp. (LVS) and Wynn Resorts, Limited (WYNN) have insider ownership of around 49% and 20%, respectively. Meanwhile, Caesars Entertainment Corp (CZR) has insider ownership of just around 1%.

If you are looking to invest in gaming companies, you could invest in an ETF such as the Consumer Discretionary Select Sector SPDR Fund (XLY) that invests heavily in the leisure industry.

In the next part of the series, you’ll learn why PENN generates significant operating cash flows.

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