“Put your cards on the table” means to be honest with other people and to tell them one’s thoughts, plans, etc., according to Merriam-Webster’s definition. The idiom comes from poker games as players put their cards on the table to prove they have the winning hand.
This week’s insider buy with a purpose touches on both the meaning and origins of putting your cards on the table.
A cluster of five Bally’s Corporation (BALY) insiders bought a combined $910,674 of BALY stock. (1) Bally’s Corporation owns and operates gaming and racing facilities in the United States. Its gaming and racing facilities include slot machines and various casino table games, and restaurant and hotel facilities. As of April 13, 2021, it owned and operated 12 casinos that comprise of 13,308 slot machines, 460 game tables, and 3,342 hotel rooms, as well as a horse racetrack across eight states.
Bally’s directors Robeson Reeves, George Papanier, Terrence Downey, Chief Executive Officer (CEO) Lee Fenton, and Chief Financial Officer (CFO) Stephen Capp put their cards and money on the table last week.
- Reeves purchased 5,740 shares for $258,750
- Papanier bought 2,250 shares for $101,723
- Downey acquired 1,000 shares for $45,000
- CEO Fenton added 5,750 shares for $258,693
- CFO Capp secured 5,500 shares for $246,510
For all but CFO Capp, it was the first open market activity. All of their other transactions were tax or options related. The Chief Financial Officer, on the other hand, had two prior transactions and both are worth noting.
Stephen Capp bought 9,000 shares of Twin River Worldwide Holdings Inc. in August 2019 at $21.95 for $197,550. (2) Minimal research reveals BALY was formerly known as Twin River Worldwide Holdings, Inc. and changed its name to Bally’s Corporation in November 2020.
About 19 months and a name change later, the CFO sold 100,000 shares of BALY at $68.46 in March 2021. Capp made $418,590 on his 2019 purchase, more than doubling his money. And now he’s back for more with nearly a quarter-million buy a little less than eight months from being a seller. In the meantime, BALY fell from $68.46 (sell price) to $44.82 (recent buy price).
Sometimes, one has to connect the dots as to why the insiders are buying, but a scan of BALY’s recent headlines probably makes dot connection unnecessary. The company was awarded “one of nine licenses to conduct online sports betting in the State of New York.” (3) BALY Chairman Soo Kim points out that New York is “the most populous state to enable OSB (online sports betting).”
The New York news is fresh and might not be reflected in Wall Street’s outlook for next year, yet. As is, analysts have a consensus earnings per share (EPS) estimate of $2.21 for 2022. (4) Next year’s forecast is 51% higher than this year’s expectation of $1.46 per share. The top line is forecasted to rev too. Sales are projected to reach $2.64 billion next year, up 92.5% from $1.37 billion this year.
The average BALY peer trades at 32.31 times earnings (P/E) compared to 28.4 for Bally’s. If the gaming company continues to trade at its current earnings valuations and hits Wall Street’s bottom-line target, then BALY would trade at $62.76. As we type, BALY trades at $46.13.
Outlook: Based on Wall Street’s expectations for next year, recent news, and strong insider buying, Bally’s Corporation (BALY) could offer attractive upside for investors seeking exposure to the gaming sector. Based on its five-year beta of 2.3 (4), BALY is only appropriate for investors with above average risk tolerance.
1 – https://www.secform4.com/insider-trading/1747079.htm
2 – https://www.secform4.com/insider-trading/1242287.htm
3 – https://finance.yahoo.com/news/ballys-corporation-awarded-online-sports-211500510.html
4 – https://finance.yahoo.com/quote/BALY/key-statistics?p=BALY