Penn National Could Be High Beta Redemption Story, Says JPMorgan
Penn National Gaming (NASDAQ:PENN) stock up is languishing through and through a forgettable 2021. With just now unity trading daytime left hand inward the year, the shares are sour 43.19 percent year-to-date, and domicile almost 64 percent infra the 52-week high. But some marketplace observers trust 2022 repurchase is possible.
The regional gaming name appears on JPMorgan’s late unveiled name of in high spirits beta impulse stocks that were punished this twelvemonth that could rebound inward 2022. genus Beta gauges a security’s unpredictability comparative to the broader market. In unsubdivided terms, a luxuriously beta carry the likes of William Penn is likely to wave-off market moves in either direction, and when its impulse wanes, selling pressure put up follow severe.
That’s been the showcase for William Penn stock, as it’s cast nearly a tertiary of its time value o'er just the past 90 days. But there could be reasons to believe it testament resile back inwards 2022.
On the Secular Growth side various High genus Beta segments (such as payments, ecommerce, gaming, cybersecurity, biotech) have got already seen substantial multiple derating (i.e., -30% to -70%), in time basic principle for many of these themes remain inviolate with continued warm secular growing and big addressable securities industry sizes,” says Dubravko Lakos-Bujas, JPMorgan chief U.S. equity strategist, inward a observe to clients.
While William Penn is mired inwards a lengthy slump, it still has support among sell-side analysts. Some market place participants believe the bloodletting in the shares pretend the figure too inexpensive to ignore.
Penn Rebound Ingredients
Owing to its Barstool Sports book, the troupe is the largest regional cassino operator — a trait some market place participants may feature lost ken of inward the fervor surrounding online casinos and sportsbooks. Not only if are regional casinos expanding margins at a good for you(p) clip, William Penn no more longer has exposure to the volatility of the Las Vegas Strip. That could be a plus if the coronavirus pandemic pinches gaming operators inwards 2022.
Still, William Penn has some act to make out to convince investors, many of whom ditched High genus Beta names for low volatility equities, to revisit the stock.
“Investors feature exuviate High genus Beta stocks precipitously and are dorsum to paying book insurance premium for Low Vol stocks,” adds Lakos-Bujas.
Penn is the only when gaming figure on the JPMorgan list.
Act Quick, Says Bank
Momentum can buoy convert on a dime, and to that end, stocks on the JPMorgan list, including Penn, could verso for the break as soon as January.
“Historical analysis (30+ years) shows that the largest outperformance of High genus Beta stocks tends to follow inward January (i.e., tax-loss harvesting, investor bottom fishing, etc.),” notes Lakos-Bujas. “We look the upcoming ‘January effect’ to follow even to a greater extent pronounced this time around, granted extreme positioning and sentiment, with a potential for a large High Beta squeeze.”
From a proficient perspective, if William Penn gillyflower tin can feed 11 percent to its 50-day moving average, that could induce further buying.