Caesars Stock Down 30% This Past Year but One Fund Is Wagering $29 Million on a Turnaround

On November 13, Pennsylvania-based Quaker Capital Investments disclosed a buy of 279,390 shares of Caesars Entertainment (NASDAQ:CZR). The overall position value increased by $6.46 million.

What Happened

Quaker Capital Investments reported a significant increase in its stake in Caesars Entertainment (NASDAQ:CZR) in a quarterly Form 13F filed with the U.S. Securities and Exchange Commission on November 13. The fund acquired an additional 279,390 shares over the quarter, bringing its total to 1.08 million shares worth about $29.28 million, representing 7.88% of reported U.S. equity assets as of September 30.

What Else to Know

Quaker Capital’s Caesars Entertainment position was increased and now accounts for 7.88% of 13F AUM, outside the fund’s top five holdings.

Top holdings after the filing:

• NYSE: EQT: $62.31 million (16.8% of AUM)
• NASDAQ: SATS: $47.50 million (12.8% of AUM)
• NASDAQ: LILAK: $47.13 million (12.7% of AUM)
• NYSE: UBER: $36.71 million (9.9% of AUM)
• NYSE: IHS: $29.80 million (8.0% of AUM)

As of Thursday, Caesars Entertainment shares were priced at $23.39, down about 30% over the past year and well underperforming the S&P 500, which is up about 16% in the same period.

Company Overview

Company Snapshot

• Caesars Entertainment's products and services include casino gaming (poker, keno, table games, slots), hotel accommodations, dining, nightlife, retail, and online sports betting and iGaming.
• The business model centers on generating revenue from gaming operations, hospitality services, entertainment venues, and digital wagering platforms across a broad portfolio of owned and managed properties.
• Primary customers are leisure travelers, gaming enthusiasts, and online bettors in the United States, with a focus on both on-site and digital engagement.

Caesars Entertainment is a leading U.S. gaming and hospitality company operating a diversified portfolio of casinos, hotels, and digital platforms. The company leverages a broad geographic presence and brand recognition to attract a wide customer base across multiple channels. Strategic investments in both physical properties and online gaming position Caesars Entertainment to capitalize on evolving consumer preferences in the gambling and entertainment industry.

Foolish Take

Caesars shares have slid roughly 30% over the past year, and the latest earnings report offered little immediate relief. Third-quarter revenue held flat at $2.9 billion, but profitability moved in the wrong direction, with a $55 million net loss (compared to $9 million last year) and adjusted EBITDA falling to $884 million from nearly $1 billion a year earlier. Las Vegas was softer on visitation and table hold, while digital posted strong volume but weaker margins, a reminder that scale alone does not guarantee earnings leverage.

Against that backdrop, increasing exposure looks less like momentum chasing and more like a balance sheet and asset value call. Caesars ended the quarter with $11.9 billion in total debt, but it also generated enough cash flow to retire high-cost notes and repurchase $100 million in stock during the quarter, signaling management’s confidence in underlying value. Within this portfolio, Caesars sits below larger energy and telecom positions, suggesting diversification rather than an all-in gamble.

Ultimately, Caesars is not a clean earnings story right now, but it owns irreplaceable real estate, has a growing digital footprint, and is actively reducing leverage. That matters to long-term investors assessing a turnaround play.

Glossary

Form 13F: A quarterly report filed by institutional investment managers disclosing their U.S. equity holdings.

Assets Under Management (AUM): The total market value of investments managed on behalf of clients by a fund or firm.

Reportable assets: Investments that must be disclosed in regulatory filings, such as those required by the SEC.

Stake: The amount of ownership or shares held in a company by an investor or fund.

Top holdings: The largest investments in a fund's portfolio, usually ranked by market value or portfolio percentage.

Quarterly filing: A regular report submitted every three months to regulatory authorities, detailing financial or investment information.

Portfolio: A collection of financial assets, such as stocks and bonds, held by an investor or fund.

Digital wagering platforms: Online systems that allow users to place bets or gamble over the internet.

iGaming: Online gambling activities, including casino games and sports betting, conducted via digital platforms.

TTM: The 12-month period ending with the most recent quarterly report.

Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends EQT and Uber Technologies. The Motley Fool has a disclosure policy.