It’s Time to Follow the Insiders on This Trade

Multiple investors are eyeing Caesars for a potential merger or buy – let’s follow the money.

Successful investors don’t make a lot of errors. They are known for taking big, concentrated positions. Regardless of what “portfolio theory” teaches us, the biggest and best investors of our time became that way by betting big.

Warren Buffett is a great example of this. He tells the world to invest using index funds. Yet his billions are concentrated in fewer than three dozen companies, with the top 10 accounting for more than half his total portfolio.

Bill Gates didn’t strike it rich by buying a ton of stocks in other companies. He did so by holding on to as many shares of Microsoft as he could. Jeff Bezos did the same with Amazon.

Sure, these investors all hold other investments, but those other investments pale in comparison to their concentrated “big bet” holdings.

Carl Icahn is no different – he looks for an opportunity and then loads up on it.

That’s exactly what he’s doing with casino and gaming company Caesars Entertainment (Nasdaq: CZR). Icahn has been accumulating shares in Caesars and now holds almost 28% of the company through a combination of stocks and other instruments.

Icahn has put his own people on the board of directors, and he’s aiming for the company to sell itself or merge in the very near future. Caesars’ insiders are not being shy about buying their own stock either… including outgoing CEO Mark Frissora!

Caesars is in play, and there is interest from more than one party to acquire or merge with the company.

Tilman Fertitta, owner of Golden Nugget Casinos and sole owner of restaurant powerhouse Landry’s, has an offer on the table for Caesars. Also, Eldorado Resorts (Nasdaq: ERI) is looking at a possible merger with Caesars. And those are just the two we know about.

When the big guns start to take concentrated positions, like Icahn has with Caesars, it’s time to think about joining them. Icahn is famous for his ability to force transactions and unlock shareholder value. His tactics may be upsetting to some, but as investors, we are focused on our bottom line, and he is squarely on the side of profits!

ACTION PLAN: We’ll be putting Caesars on our screens – and in our crosshairs – in The War Room beta. Keep a close watch on the shares for a possible entry point from market weakness.


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