During the first quarter of 2022, Point72 Asset Management, a hedge fund headed by Mets owner Steve Cohen, bought up 633,800 shares of VICI Properties. This comes amidst a slumping market and is likely an attempt by Cohen to adopt a more defensive strategy.
Cohen Is Playing It Safe with Low-Risk Purchases
It looks like a break from the norm for the 65-year-old hedge fund manager, who has earned a reputation for making big, risky bets on volatile stocks. Cohen is also betting safe on BP, as he bought an additional 3,276,969 shares of the world’s largest oil and gas producer, bringing the total value of his stake in the company to $122 million. These moves appear to be paying off since both VICI and BP shares are currently on the rise.
Steve Cohen, who has an estimated net worth of $11.9 billion, maintains a portfolio containing nearly 1,500 investments, many of which are in the gaming industry. The hedge fund’s investment in VICI, was valued at $18.03 million at the end of Q1 2022. Point72 has recently shifted its focus to defensive stocks with dividend yields above 10-year Treasury yields, and VICI perfectly fits these requirements.
Cohen is not the only fan of the casino REIT. JPMorgan analyst Anthony Paolone expressed his positive opinion on the stock, writing:
“We think VICI has strong earnings visibility following the closing of the MGP deal and the Venetian transaction… We believe the company’s free cash flow reinvestment alone – when combined with contractual increases – should drive bottom-line earnings growth of about 4% as a starting point; and we think it has a sizable addressable market that should grow beyond this.”
JPMorgan analyst Anthony Paolone
VICI Has a Lot of Potential for Growth
VICI is currently the largest casino REIT (Gaming real estate investment trust) and the biggest landlord on the Strip after its $17.2 billion acquisition of MGM Growth Properties. The deal increased VICI’s annual collected rents by more than $1 billion. VICI now owns 10 resorts in Las Vegas, and its portfolio includes 43 casinos, 450 restaurants, multiple bars, and clubs, as well as four large golf courses.