SCP Investment LP Purchases Shares of 325,000 DraftKings Inc. $DKNG

Key Points

• SCP Investment LP bought a new stake in DraftKings during the fourth quarter, purchasing 325,000 shares valued at about $11.2 million. The position now represents 9.1% of the fund’s portfolio and makes DraftKings its third-largest holding.
• DraftKings shares were down 3.9% to open at $25.30, while the stock remains well below its 52-week high of $48.78. The company has a market cap of about $12.55 billion and a high valuation, with a PE ratio of 421.67.
• The company’s latest earnings showed revenue growth of 16.8% year over year to $1.65 billion, but EPS of $0.20 missed analyst expectations by a penny. Despite mixed results, Wall Street remains generally positive, with a Moderate Buy consensus and an average price target of $34.15.

SCP Investment LP acquired a new stake in DraftKings Inc. (NASDAQ:DKNG - Free Report) during the 4th quarter, according to its most recent 13F filing with the Securities and Exchange Commission (SEC). The fund acquired 325,000 shares of the company's stock, valued at approximately $11,200,000. DraftKings makes up 9.1% of SCP Investment LP's portfolio, making the stock its 3rd largest position. SCP Investment LP owned about 0.07% of DraftKings as of its most recent filing with the Securities and Exchange Commission (SEC).

A number of other hedge funds have also recently made changes to their positions in the business. Dagco Inc. purchased a new stake in shares of DraftKings during the fourth quarter worth about $26,000. Ameriflex Group Inc. lifted its holdings in DraftKings by 100.0% in the 3rd quarter. Ameriflex Group Inc. now owns 810 shares of the company's stock worth $30,000 after purchasing an additional 405 shares in the last quarter. Asset Dedication LLC bought a new position in DraftKings in the 3rd quarter worth approximately $37,000. AlphaQuest LLC bought a new position in DraftKings in the 3rd quarter worth approximately $41,000. Finally, Montag A & Associates Inc. grew its holdings in DraftKings by 82.5% during the 4th quarter. Montag A & Associates Inc. now owns 1,106 shares of the company's stock valued at $38,000 after buying an additional 500 shares in the last quarter. Institutional investors own 37.70% of the company's stock.

DraftKings Stock Down 3.9%

Shares of DKNG opened at $25.30 on Wednesday. The company has a quick ratio of 1.02, a current ratio of 1.02 and a debt-to-equity ratio of 3.03. The business has a fifty day moving average of $23.64 and a 200 day moving average of $27.73. The company has a market cap of $12.55 billion, a PE ratio of 421.67 and a beta of 1.66. DraftKings Inc. has a 52-week low of $20.46 and a 52-week high of $48.78.

DraftKings (NASDAQ:DKNG - Get Free Report) last posted its quarterly earnings data on Friday, May 8th. The company reported $0.20 earnings per share for the quarter, missing analysts' consensus estimates of $0.22 by ($0.02). The firm had revenue of $1.65 billion for the quarter, compared to the consensus estimate of $1.63 billion. DraftKings had a net margin of 0.93% and a return on equity of 13.51%. The company's revenue was up 16.8% on a year-over-year basis. During the same quarter last year, the firm earned ($0.07) EPS. On average, sell-side analysts expect that DraftKings Inc. will post 0.6 EPS for the current year.

Insider Activity at DraftKings

In other DraftKings news, Director Jocelyn Moore sold 2,150 shares of the business's stock in a transaction that occurred on Friday, March 13th. The stock was sold at an average price of $25.60, for a total transaction of $55,040.00. Following the completion of the transaction, the director owned 1,406 shares in the company, valued at $35,993.60. The trade was a 60.46% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available at this link. Also, insider Paul Liberman sold 484,417 shares of the company's stock in a transaction that occurred on Wednesday, March 11th. The shares were sold at an average price of $25.16, for a total value of $12,187,931.72. Following the transaction, the insider directly owned 213,597 shares in the company, valued at approximately $5,374,100.52. This represents a 69.40% decrease in their position. The SEC filing for this sale provides additional information. In the last ninety days, insiders have sold 521,663 shares of company stock worth $13,144,962. Insiders own 47.18% of the company's stock.

Wall Street Analysts Forecast Growth

DKNG has been the topic of several recent analyst reports. Moffett Nathanson cut shares of DraftKings from a "buy" rating to a "neutral" rating and reduced their price objective for the company from $38.00 to $27.00 in a research report on Friday, April 24th. Wells Fargo & Company reaffirmed an "overweight" rating and set a $32.00 target price on shares of DraftKings in a research note on Sunday, May 10th. Citizens Jmp reduced their price target on shares of DraftKings from $38.00 to $34.00 and set a "market outperform" rating on the stock in a report on Wednesday, April 1st. UBS Group reiterated a "buy" rating and issued a $43.00 price target on shares of DraftKings in a research note on Wednesday, May 20th. Finally, Needham & Company LLC reissued a "buy" rating and set a $35.00 price objective on shares of DraftKings in a report on Monday, May 11th. One research analyst has rated the stock with a Strong Buy rating, twenty-seven have assigned a Buy rating, nine have assigned a Hold rating and two have given a Sell rating to the stock. According to data from MarketBeat.com, the company currently has an average rating of "Moderate Buy" and a consensus price target of $34.15.

About DraftKings

DraftKings Inc is a leading digital sports entertainment and gaming company specializing in daily fantasy sports, sports betting and iGaming products. The company provides an integrated platform where users can participate in daily fantasy contests, place wagers on professional sports events, and enjoy a range of online casino-style games. DraftKings' proprietary technology supports real-time odds, live scoring and advanced analytics to enhance the user experience across mobile and desktop applications.

Founded in 2012 by co-founders Jason Robins, Matthew Kalish and Paul Liberman, DraftKings began as a daily fantasy sports provider and rapidly expanded into regulated sports betting following legislative changes in the United States.

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