In the quarter, we increased our investment in Penn National Gaming, Inc. (PENN, Financial). Penn is the largest regional casino operator. The company is highly acquisitive and well diversified, with less than 20% of its cash flow coming from any one property. Penn has a strong pipeline of projects. Its casinos in Kansas, Toledo and Columbus are rapidly growing; we expect the rebranding of its recently acquired Hollywood St. Louis casino and the opening of two new racetracks in Ohio to boost results in 2014. Longer term, the company should be able to continue to invest in its properties and potentially make accretive acquisitions. Otherwise, it can use its cash flow to pay down debt, which would be accretive for its shareholders. Penn is vying for licenses in Massachusetts and Philadelphia, which could be awarded in mid-2014. Possible gaming expansions in Japan, Korea, Texas or Florida offer further growth opportunities. (David Baron)
From Baron Funds fourth quarter commentary 2013.
