Caesars, Flutter Among Stocks Most Important to Hedge Funds

• Gambling
• 24 February 2025

Caesars Entertainment (NASDAQ: CZR) and Flutter Entertainment (NYSE: FLUT) rank among the key US-listed stocks favored by hedge funds. 

Goldman Sachs published its list of "very important positions" (VIPs) utilizing data from the end of 2024, featuring Caesars and Flutter. According to the count of hedge funds that include gaming stocks in their top-10 long positions, Flutter (16 hedge funds) and Caesars (11) hold the 20th and 34th positions, respectively, on the Goldman VIP list. They are the sole gaming stocks listed.

"(The ranking) represents a tool for investors seeking to follow the smart money based on 13-F filings,” said Ben Snider, senior strategist on the US portfolio strategy macro team at Goldman Sachs, in the note.

According to Seeking Alpha, the stocks featured on the Goldman VIP list have significantly outperformed the S&P 500 year-to-date and have surpassed the domestic equity benchmark in 60% of quarters over the last 24 years. Caesars has increased by 4.85% since the beginning of the year, whereas FanDuel's parent company, Flutter, has risen by 4.57%. 

Caesars Adored by Hedge Funds in a Different Manner 

Snider and his team examined the concentration of stocks, specifically the proportion of market capitalization that hedge funds hold. By that standard, Caesars ranks well. 

By the end of 2024, hedge funds held 13% of the market cap of Harrah’s operator, as reported by Goldman Sachs. Based on that metric, the gaming stock occupies the sixth position on the Goldman concentration list and is the sole name from that sector to be included in that group. This aligns with Caesars' long-standing reputation as a “hedge fund hotel.” 

Numerous hedge funds take an opportunistic stance when dealing with specific equities. Some openly claim they aim to take advantage of "special situations" or that they identify as "activist investors." Special situations involve purchasing substantial quantities of a company's shares to advocate for a sale. Other hedge funds purchase shares in a firm to secure a board position, which allows them to initiate changes, such as divesting assets or implementing significant cost cuts. 

Currently, it seems that hedge fund strategies regarding Caesars are not influenced by either of the two factors noted earlier, since the Horseshoe operator is not available for purchase and is effectively reducing debt without persuading the investment community. 

Certain Verification for Flutter 

For Flutter, the admiration from hedge funds signifies a type of endorsement. Last year, the Dublin-based sportsbook operator debuted its shares on the New York Stock Exchange (NYSE), eventually relocating its main listing to that platform from London. 

A reason for the shift was to present the stock to a larger number of US professional investors. The Goldman data validate that the action was successful. 

The action has yielded benefits in various other aspects. For instance, nearly 70 ETFs listed in the US currently hold shares of Flutter.