PENN Entertainment, Inc. (PENN): Among David Einhorn's Stock Picks with Huge Upside Potential

We recently published an article titled Billionaire David Einhorn's 10 Stock Picks with Huge Upside Potential. In this article, we are going to take a look at where PENN Entertainment, Inc. (NASDAQ:PENN) stands against David Einhorn's other stock picks with huge upside potential.

David Einhorn is a widely renowned hedge fund manager who co-founded Greenlight Capital in 1996. The billionaire graduated from Cornell University and gained experience in the hedge fund industry under the tutelage of Gary Siegler and Peter Collery at the SC Fundamental Value Fund. Einhorn rose to prominence in 2002, when he successfully questioned the accounting practices of Allied Capital, a private equity firm, and disclosed having a short position at the Sohn Investment Conference. The stock plummeted, sparking a heated exchange of claims between Allied and Einhorn. A five-year-long inquiry by the United States Securities and Exchange Commission (SEC) confirmed Einhorn's claim, revealing that Allied did breach accounting rules related to securities laws.

Greenlight Capital focuses on value-oriented initiatives. The investment management firm's primary concentration lies in long and short positions in listed equity securities. This strategy allows Einhorn to navigate both rising and falling markets, giving him flexibility during periods of uncertainty.

Greenlight Capital gained 8.2% in the first three months of 2025, boosted by a gold bet that it believes will pay out further as Trump administration policies continue to shake the economy. In a letter to clients, the firm stated that the precious metal was "by far the biggest winner" in their portfolio, increasing 19%. Gold is frequently used as an inflation hedge, and Greenlight believes the White House's policies would only worsen inflation. "All current Administration policy roads lead to higher longer-term inflation." the letter added. Greenlight reasoned that slower growth would push the US Federal Reserve to drop interest rates more than markets anticipate. As a countermeasure, the fund acquired a stake in SOFR futures (secured overnight financing rate), while also including tail protection in case the dollar falls significantly compared to the euro and yen.

Another aspect of the Greenlight letter was the assertion that the US equities market is in the early stages of a bear market. To that end, the firm was able to determine precisely when to opt out of its equity holdings. According to the firm's letter:

"Bear markets do not go straight down. They are punctuated with 'rip-your-face-off' rallies based on big headlines, extreme investor sentiment, and experience that buying the dip usually pays off."

Our Methodology

For this article, we examined Greenlight Capital’s Q4 2024 13F filings to list down billionaire David Einhorn’s stock picks with the highest upside potential. We ranked the companies in ascending order of their upside potential. These equities are also popular among elite hedge funds.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

PENN Entertainment, Inc. (NASDAQ:PENN)

Greenlight Capital's Q4 Stake: $113.9 million

Analyst Upside as of April 30: 40.99%

Number of Hedge Fund Holders: 51

Penn Entertainment, Inc. (NASDAQ:PENN) offers integrated entertainment, sports content, and casino gaming experiences. The company consists of five segments: Northeast, South, West, Midwest, and Interactive. Its portfolio includes casinos, racetracks, and online sports betting in a number of locations.

On April 3, Raymond James reiterated its Market Perform rating for PENN Entertainment, Inc (NASDAQ:PENN). RJ Milligan, the firm's analyst, revised the model and forecasts for the company after taking into account fourth-quarter performance and 2025 guidance. In his statement, Milligan stated that, while he feels PENN Entertainment's shares are currently undervalued, the firm prefers to remain cautious. This position stems from the company's continued journey toward digital profitability, which Milligan referred to as the "anchor around the stock."

In the fourth quarter of 2024, the company's Interactive division generated revenues of $142 million. The Interactive division is primarily focused on its ESPN BET online sports betting platform. PENN Entertainment, Inc (NASDAQ:PENN) expects to break even this year, with each successive quarter generating a decreasing loss, culminating in the first profitable quarter in Q4 2025 since the introduction of ESPN BET.

Overall PENN ranks 7th on our list of David Einhorn's stock picks with huge upside potential. While we acknowledge the potential for PENN as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%.  If you are looking for an AI stock that is more promising than PENN but trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

READ NEXT: 20 Best AI Stocks to Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

Disclosure: None. This article is originally published at Insider Monkey.