This Fund Sold $39 Million of Boyd Gaming Stock While Exiting MGM and Downsizing United Parks Bets

HG Vora Capital Management fully liquidated its entire $39.1 million position in Boyd Gaming Corporation (BYD) during Q3, selling 500,000 shares, as disclosed in a recent SEC filing. This divestment, part of a broader reduction in leisure sector exposure that also included MGM and United Parks, suggests the firm perceives a narrowed upside or more productive capital redeployment opportunities. Boyd Gaming's Q3 results, featuring mixed profitability with declining adjusted EBITDAR and flat adjusted earnings despite revenue growth, likely contributed to HG Vora's decision, signaling potential challenges for the stock to attract deep-value capital until profitability stabilizes.

Analysis

HG Vora Capital Management fully liquidated its $39.1 million position in Boyd Gaming (BYD) during Q3, selling 500,000 shares, as revealed in a recent SEC Form 13-F filing. This divestment is part of a broader pattern, as the firm also reduced exposure to United Parks and exited MGM in the same quarter, signaling a strategic re-evaluation of the leisure sector by a manager focused on discounted, cash-generative businesses. This suggests the perceived upside for BYD has narrowed or that capital can be more productively deployed elsewhere.

Boyd Gaming's Q3 results likely influenced HG Vora's decision, despite revenue growth to $1 billion from $961 million. Profitability metrics were mixed, with adjusted EBITDAR declining to $321.8 million from $336.6 million and adjusted earnings remaining flat at $139.1 million. This decline in EBITDAR was attributed to lower market-access fees post-FanDuel transaction, and online and room revenues also fell year-over-year.

The stock's underperformance against the S&P 500 (9% vs. 14% gain over the past year) further contextualizes the divestment. While Boyd Gaming is fundamentally solid with disciplined capital returns and strong regional momentum, its struggle to stabilize profitability may deter deep-value investors seeking clearer opportunities. The one-time $1.4 billion gain from the FanDuel sale does not alter this underlying trend in operational profitability.

Key Decisions for Investors

• Investors should closely monitor Boyd Gaming's adjusted EBITDAR and earnings stabilization in upcoming quarters, as this is a key factor for attracting deep-value capital.
• Consider HG Vora's broader reduction in leisure sector exposure as a potential signal for re-evaluating overall portfolio allocation to the gaming and leisure industries.
• Re-evaluate BYD's current valuation relative to its mixed profitability trends and underperformance against the broader market, considering whether its 'fundamentally solid' status justifies current or future positions without clearer profit stabilization.