We recently compiled a list of the 7 Stocks on Jim Cramer's Radar.In this article, we are going to take a look at where PENN Entertainment, Inc. (NASDAQ:PENN) stands against the other stocks on Jim Cramer's radar.
Jim Cramer, host of Mad Money, shared his thoughts on factors that could lead to market growth in 2025, pointing out some key changes that could benefit investors. He expressed optimism about the shift in leadership at the Federal Trade Commission (FTC) and the Justice Department, particularly with the departure of current FTC Chief Lina Khan, whom he criticized for her harsh stance on large businesses.
“The brooming of Biden's antitrust regulators as the FTC and the Justice Department, that will be fabulous, fabulous for the market.”
According to Cramer, Khan’s approach was one of hostility toward any major business deal, regardless of the potential positive effects on the economy or on workers. He argued that with the removal of the old guard, a wave of deals could emerge that would help rationalize various industries.
This, in turn, would give smaller companies in sectors like banking, retail, entertainment, pharmaceuticals, and enterprise software a better chance to compete against larger corporations. Cramer was enthusiastic about the potential for these changes, stating, “Fantastic for the stock market. Just fantastic.”
Cramer also touched on an important issue in the market: a shortage of equities. He noted that the lack of available stock could lead to higher prices. He explained that mergers and acquisitions activity could help remove some of the available stock from the market, reducing supply and potentially driving up stock prices.
“Always remember the stock market is indeed a market and like any other market, when there's not enough supply, you get higher prices.”
Moving on to the housing market, Cramer discussed the effects of overbuilding, like in Florida, where housing prices have been impacted. He explained that when mortgage rates rise, housing prices tend to drop. This price drop often leads to a wait-and-see approach from buyers, who hold out for even lower prices. As sellers grow more desperate, they typically lower prices further in a bid to move their properties.
“It's called the cycle, although it hasn't been operating normally for the last few years. I think 2025 will be the year the cycle reasserts itself and the Fed will win big on this one. Big enough to be able to cut rates slowly but cut nonetheless, which of course is what we need.”
Our Methodology
For this article, we compiled a list of 7 stocks that were discussed by Jim Cramer during an episode of Mad Money aired in January. We listed the stocks in ascending order of their hedge fund sentiment as of the third quarter, which was taken from Insider Monkey’s database of 900 hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Is PENN Entertainment Inc. (PENN) the Best Sin Stock to Invest in 2025?
The bright and neon lights of a glitzy casino, revealing the company's iCasino and gaming properties.
PENN Entertainment, Inc. (NASDAQ:PENN) offers integrated entertainment, sports content, and casino gaming, and it provides online sports betting and iCasino services under various brands. Here’s what Mad Money’s host had to say about it:
“No, I don't like Penn Entertainment. They, yeah, you know, a new broom needs to sweep clean there. Let me tell you.”
On January 24, Barclays increased its price target on PENN Entertainment (NASDAQ:PENN) to $23 from $22 and maintained an Overweight rating on the stock as part of a Q4 preview for the gaming industry. While the analyst expects Vegas, Macau, and digital sectors to potentially underperform, this appears to be already factored in, and “beaten-down regionals” may surpass low expectations, offering hope for modest growth. The firm expects positive Q4 gaming reports for regional operators.
Additionally, as of the third quarter of 2024, PENN Entertainment (NASDAQ:PENN) reported a total liquidity of $1.8 billion, which includes $834 million in cash and cash equivalents. The company has no debt maturities until 2026 when its $330 million convertible notes are due.
Looking ahead, the company expects to continue generating positive free cash flow in 2025 and beyond, with the Interactive segment anticipated to make a significant contribution to adjusted EBITA by 2026. Additionally, four retail growth projects are slated for completion by the first half of 2026, which should further support the company's financial performance.
Overall PENN ranks 4th on our list of the stocks on Jim Cramer's radar. While we acknowledge the potential of PENN as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than PENN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
