Caesars, Flutter Among Stocks Most Important to Hedge Funds

Posted on: February 24, 2025, 06:18h. 

Last updated on: February 25, 2025, 09:20h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.
  • Hedge funds have large exposure to the pair of gaming stocks
  • Caesars a top holding for many hedge funds

Caesars Entertainment (NASDAQ: CZR) and Flutter Entertainment (NYSE: FLUT) are among the US-listed stocks that are most important to hedge funds.

Caesars Digital
Caesars Palace Las Vegas. The operator’s stock, along with Flutter Entertainment, is a hedge fund favorite. (Image: YouTube)

Goldman Sachs released its “very important positions” (VIPs) list based on data as of the end of 2024, with Caesars and Flutter making appearances. Based on the number of hedge funds featuring the gaming stocks among their top-10 long positions, Flutter (16 hedge funds) and Caesars (11) rank 20th and 34th, respectively on the Goldman VIP list. They’re the only gaming stocks appearing on the list.

(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.

The stocks on the Goldman VIP list have clobbered the S&P 500 on a year-to-date basis while beating the domestic equity gauge in 60% of quarters over the past 24 years, according to Seeking Alpha. Caesars is up 4.85% since the start of the year while FanDuel parent Flutter is higher by 4.57%.

Caesars Beloved by Hedge Funds in Another Way

Snider and his team also analyzed stocks’ concentration, or their percentage of market capitalization owned by hedge funds. By that metric, Caesars scores high.

As of the end of 2024, 13% of the Harrah’s operator’s market cap was owned by hedge funds, according to Goldman Sachs. By that metric, the gaming stock ranks sixth on the Goldman concentration list and is the only name from that industry to appear in that group. That jibes with Caesars’ long-running history of being a “hedge fund hotel.”

Many hedge funds are opportunistic in their approaches to individual equities. Some overtly say they are looking to exploit “special situations” or that they are “activist investors.” Special situations include buying large amounts of shares of a company to push for a sale. Other hedge funds buy shares in a company to land a board seat so they can drive change, including asset sales or major cost reductions.

For now, it appears hedge fund positioning in Caesars isn’t derived from either of the two factors mentioned above, as the Horseshoe operator isn’t for sale and is doing an admirable job of slashing debt without cajoling from the investment community.

Some Validation for Flutter

For Flutter, the adulation of hedge funds represents a form of validation. Last year, the Dublin-based sportsbook operator listed its shares on the New York Stock Exchange (NYSE), ultimately shifting its primary listing to that venue from London.

One of the reasons for the move was to get the stock in front of more US professional investors. The Goldman data confirm the move was effective.

The move has paid dividends in other ways. For example, Flutter shares are now held by nearly 70 US-listed exchange-traded funds (ETFs).