Caesars Entertainment Sees Large Insider Purchase

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Insiders sell company stock for many reasons. But they only buy stock for one reason – they expect it to go up.

In this report, we are going to highlight some interesting insider buying at Caesars Entertainment Inc (CZR:US). Caesars is the largest gaming company in the US. Its brands include Caesars Palace, Planet Hollywood, Circus Circus Reno, and Harrah’s. The company is listed on the Nasdaq and currently has a market capitalization of around $9.60 billion.

Insider Buying at Caesars Entertainment

2iQ data shows that on May 5, board member Michael Pegram purchased 25,000 CZR shares at a price of $45.02 per share. This trade cost the insider around $1.13 million and increased his holding to 121,697 shares.

Building Up His Position

This is not the first time that Mr. Pegram has made a large stock purchase. Back in November, he purchased 25,000 CZR shares at a price of $44.74 per share. Clearly, he sees value at current levels and is building up his stake here.

It’s worth noting that Mr. Pegram has considerable industry experience. Currently, he is the managing member of GPEG LLC, which owns and operates five casinos in the Reno/Carson City area. Previously, he served on the Board of Directors of Eldorado Resorts between 2014 and 2020, before the business was acquired by Caesars.

Strong Quarter

Caesars' recent Q1 results showed that the company has momentum right now.

For the quarter, the company posted GAAP net revenues of $2.8 billion versus $2.3 billion for the same period a year earlier. Meanwhile, GAAP net loss shrunk to $136 million compared to a net loss of $680 million for the comparable prior-year period.

Highlights for the quarter included a strong performance from Las Vegas, where revenues were up 24% year on year, and a solid performance from Caesars Digital, which nearly broke even for the quarter, despite launching operations in Ohio and Massachusetts.

We delivered another strong quarter led by a new Q1 Adjusted EBITDA record in Las Vegas,” commented CEO Tom Reeg.

On the back of these results, analysts at JP Morgan raised their price target for the stock from $69 to $70 – around 50% higher than the current share price.

In light of the momentum Caesars has right now, we see the insider buying as a bullish development.