It was defensive holding on “3rd Down and 2” last night on the final drive during regulation for the Buffalo Bills. The referees didn’t call the penalty. Tampa Bay’s defensive back held the inside pad of Bills wide receiver Stefon Diggs… the Bills kicked the field goal and then lost in overtime.
All that after an incredible comeback over the last 20 minutes. Listen, I’m not complaining. I’m resigned and conditioned to these sorts of losses. This is just the nature of being a Buffalo Bills fan. You get up in the morning and feel nothing, and get on with your week. In many ways, you start to turn into your grandmother and think to yourself, stupidly, “Well it was a good game. I hope that both teams had fun.”
Speaking of sports, there’s something brewing with Penn National Gaming. It’s time to “go long.”
Tax Harvesting Turns Nasty for PENN
Penn National Gaming (NASDAQ:PENN) is already off more than 45% on the year. That’s stunning. Given the outlandish bullishness on the gambling sector over the last year, one would think it would be back near 52-week highs north of $142.00.
But a funny thing has occurred over the last few weeks. Changes in tax laws have propelled a number of investors to sell PENN stock for an interesting reason…
Tax-loss harvesting. Investors are dumping shares of PENN to offset gains from their other wins in places like cryptocurrency and tech companies. Over the last five days alone, PENN stock is off more than 8.8%.
Why? Casinos just had their best quarter EVER in Q3, and the company actually dodged a huge regulatory bullet by avoiding the New York sports betting industry. It could be that investors are cautious about the company’s partnership with Dave Portnoy and Barstool, but that risk appeared baked into the deal.
Not everyone. People are selling their weaker stocks right now in a world where there are not too many of them. PENN owns 44 gambling properties in 20 states and continues to grow at a breakneck pace. Although it lacks a large presence in Las Vegas and any in Asia, the company appears to now have a stranglehold on the lucrative hockey gambling market in Canada.
I think that this stock gets the ball rolling with buyers starting the year with a lot of optimism. Wash-sale rules for PENN would clear up on this big downturn around the first week of January, so it would be smart to start building a position ahead of that date. Around January 2, that’s when it would be time to go long on calls before earnings arrive in February. Stay bullish and go long PENN.