Penn National Gaming is a large operator of casinos and racetracks.

Penn National Gaming is an American operator of casinos and racetracks.. It operates 43 facilities in the United States and Canada, many of them under the Hollywood Casino brand. The company also controls a 36% stake in Barstool Sports - this is very important as this now opens more doors to new markets. Barstool Sports is a blog based website on culture and sports. Acquiring this should lead to a large increase in traffic to thier main business of Casio operations. At the moment business is down due to coronavirus but as the economy reopens, Penn should continue to do well as people like to gamble and watch sports.

The financials of Penn are good. Current market capitalisation is $3.25bn with 2019 revenue at $5.3bn. Profit after tax was small $43.1m down $50.4m from the previous year. Profit levels have been very mixed over the last 8 years. The balance sheet is okay with $437.m cash on hand and receivables at $88.7m. Total assets amounted to $14.4bn up $3.2bn from the previous year. Total liabilities are $12.34bn, this also increased around $2.1bn. This gave net positive assets at $1.8bn.

In Q1 of 2020 revenue was $1.12bn down $166m from the same time period last year and down $225m from the last quarter. Because of the decline in revenue and the recall of monies in accounts the company took a loss of $608m in Q1. This will most likely be the case with Q2 of 2020 too. This is reasonably alarming as this will be offset probably capital write-down and will mean the company may turn into negative assets again. looking at Q1 2020 the Cash massively increased to $730.7m the highest it has ever been. Total assets have fallen to $13.9bn with liabilities are also creeping up to $12.66bn. This has meant the company had net positive assets of only $1.27bn in Q1 2020.

From a technical standpoint, the shares are mixed. MACD has turned negative and the shares are on the border of the middle of Bollinger Band. Until a clear confirmation of either a break up or down this share could be risky, as downside risk is there. To the downside, support sits at $27.04 and then MAJOR support sits at $22.50. The shares falling below $22.50 would be bad. At this level, there is support via the trendline, 50% fib and the low of the Bollinger Band. To the upside, first resistance is $32.31, a break above this could take the chart to $40.83. RSI indicates fair value at 54 meaning a strong upside or downside move is very possible.

It's clear there will be an eventual return of organized sports, which were halted to help slow the spread of the coronavirus pandemic. For Penn National to succeed, these sports need to be played again and people will need to watch. All available evidence suggests both of those things will happen.