This is a Scorecard review, revisiting a past LF0 research call against what actually happened.
Ticker: PENN Rating: Sell Published: 2026-08-19 Checkpoint: 2026-10-19 Entry price: $18.56 Latest price: $14.94 as of 2026-10-16 Stock return since entry: -19.5% Signal return: +19.5% Verdict: Correct so far
This is the 2-month checkpoint for this call. LF0 publishes monthly Scorecard updates through month 6, using the closest available daily close on or before the checkpoint date.
Previous checkpoint: our 1-month review (2026-09-19) was correct (stock return -11.4% since entry). Each monthly review is judged on its own date, so the verdict can change from one month to the next.
Read the original LF0 analysis
What I Said
I rated PENN a Sell because I thought the revenue recovery was real but not enough to offset the balance-sheet strain and weak cash conversion. My original call leaned on the fact that Q2 2026 revenue had improved to $1.9B, yet debt was still $11.1B, net debt sat at 11.7x EBITDA, and levered free cash flow was still negative. I also said I would only get more constructive if levered free cash flow turned positive for two straight quarters.
Peer Comparison
| Company | Return Since Entry |
|---|---|
| PENN (this call) | -19.5% |
| ACEL | -8.8% |
| BRSL | -17.3% |
| GENI | -16.9% |
| MCRI | -8.8% |
| MLCO | -25.9% |
Why It’s Working (Or Not)
Over this tracking window, following my Sell would have earned 19.5%, which means the bearish call has worked to date. The stock has moved lower while the peer group has also been mostly down, but PENN’s decline still fits the original thesis that leverage and negative free cash flow were too much for the valuation to absorb. The specific concern I highlighted — that the company was still paying for a recovery with debt rather than cash generation — has not been disproven by the price action. The call remains correct so far because the market has continued to treat the balance-sheet and cash-conversion risk as real rather than dismissing it.
What Could Still Prove Me Wrong
I would be wrong if PENN starts producing positive levered free cash flow for two consecutive quarters, because that would directly validate the condition I set for moving toward a Hold. I would also reassess if the company shows that the current revenue base can support materially better cash conversion without relying on additional leverage. If the stock were to re-rate higher while those cash-flow and debt metrics improve together, my original bearish case would no longer be intact.
The August 2026 Cohort
Other directional calls published the same month:
| Ticker | Rating | Entry | Latest | Stock Return | Signal Return | Verdict |
|---|---|---|---|---|---|---|
| SDGR | Sell | $17.40 | $22.60 | +29.9% | -29.9% | Incorrect so far |
| VNOM | Sell | $41.67 | $45.02 | +8.0% | -8.0% | Incorrect so far |
| AES | Sell | $14.71 | $14.95 | +1.6% | -1.6% | Incorrect so far |
| NUTX | Buy | $188.41 | $186.10 | -1.2% | -1.2% | Incorrect so far |
| LHX | Sell | $260.92 | $248.51 | -4.8% | +4.8% | Correct so far |
| RRGB | Sell | $9.51 | $8.81 | -7.4% | +7.4% | Correct so far |
| GTN | Sell | $4.83 | $4.38 | -9.3% | +9.3% | Correct so far |
| BA | Sell | $210.46 | $190.21 | -9.6% | +9.6% | Correct so far |
| OI | Sell | $6.79 | $5.83 | -14.1% | +14.1% | Correct so far |
| NNDM | Sell | $1.65 | $1.41 | -14.5% | +14.5% | Correct so far |
| WGS | Sell | $77.88 | $63.61 | -18.3% | +18.3% | Correct so far |
| ADTN | Sell | $7.76 | $6.31 | -18.7% | +18.7% | Correct so far |
| NXE | Sell | $10.40 | $8.37 | -19.5% | +19.5% | Correct so far |
| LRCX | Sell | $343.48 | $263.94 | -23.2% | +23.2% | Correct so far |
| STXS | Sell | $1.39 | $1.01 | -27.3% | +27.3% | Correct so far |
| OWLT | Sell | $5.81 | $4.11 | -29.3% | +29.3% | Correct so far |
| SPHR | Sell | $147.34 | $103.53 | -29.7% | +29.7% | Correct so far |
| SRG | Strong Sell | $2.11 | $1.62 | -23.2% | +34.8% | Correct so far |
Sector Scorecard: Consumer Cyclical
How are our Consumer Cyclical calls doing overall, and where does PENN sit among them?
| Peer call | Rating | Published | Signal return |
|---|---|---|---|
| OI | Sell | 2026-08-14 | +14.1% |
| RRGB | Sell | 2026-08-19 | +7.4% |
Across sectors, Industrials led our league table with 13 calls, a 92% hit rate, and a +23.7% average signal return, while Communication Services also stood out with 5 calls, a 100% hit rate, and a +17.4% average. Consumer Cyclical was positive with 3 calls and a 100% hit rate, but it was thin, so we do not rank it as a leader; its average signal return was +13.7%, with PENN +19.5% as the best call and RRGB +7.4% as the worst. At the other end, Energy lagged with 4 calls, a 50% hit rate, and a +2.5% average signal return, while Healthcare posted a 57% hit rate and +11.0%; the weakest single call was Technology’s NLST at -135.2%, and the best was Industrials’ BW at +74.0%.
Sector League Table
| Sector | Calls | Hit rate | Avg signal return | Best | Worst |
|---|---|---|---|---|---|
| Industrials | 13 | 92% | +23.7% | BW +74.0% | CAR -12.3% |
| Communication Services | 5 | 100% | +17.4% | SPHR +29.7% | CHTR +6.3% |
| Utilities | 3 | 33% | +17.1% | FLNC +59.8% | TLN -6.9% |
| Basic Materials | 3 | 100% | +16.8% | LAR +30.9% | GFI +5.4% |
| Financial Services | 4 | 75% | +15.9% | MARA +35.5% | BMNR -22.1% |
| Technology | 24 | 92% | +15.7% | CIFR +58.9% | NLST -135.2% |
| Consumer Cyclical | 3 | 100% | +13.7% | PENN +19.5% | RRGB +7.4% |
| Healthcare | 7 | 57% | +11.0% | CUE +38.0% | SDGR -29.9% |
| Energy | 4 | 50% | +2.5% | TPL +14.0% | VNOM -8.0% |
| Real Estate* | 2 | 100% | +18.9% | SRG +34.8% | SKYH +2.9% |
| Unclassified* | 2 | 50% | +7.4% | NXE +19.5% | FISV -4.8% |
\* Fewer than 3 calls: not ranked.
Sector by Publish Month
| Sector | Jun 2026 | Jul 2026 | Aug 2026 | Sep 2026 | Oct 2026 |
|---|---|---|---|---|---|
| Technology | +41.5% (2) | +1.0% (7) | +18.8% (3) | +20.2% (6) | +18.3% (6) |
| Industrials | +74.0% (1) | +35.1% (5) | +7.2% (2) | +2.4% (3) | +18.4% (2) |
| Healthcare | -5.1% (1) | — | +8.8% (5) | +38.0% (1) | — |
| Communication Services | — | +17.1% (1) | +19.5% (2) | +6.3% (1) | +24.6% (1) |
| Energy | — | +14.0% (1) | -8.0% (1) | -2.3% (1) | +6.4% (1) |
| Financial Services | — | +14.8% (3) | — | — | +19.0% (1) |
| Basic Materials | — | +14.3% (1) | — | +30.9% (1) | +5.4% (1) |
| Utilities | — | +59.8% (1) | -1.6% (1) | — | -6.9% (1) |
| Consumer Cyclical | — | — | +13.7% (3) | — | — |
| Real Estate | +2.9% (1) | — | +34.8% (1) | — | — |
| Unclassified | — | — | +19.5% (1) | — | -4.8% (1) |
Each cell: average signal return to date of the calls published that month (calls in brackets). Signal return is direction-adjusted, so a positive number means our call is right.
Live LF0 scorecard: The Scorecard | Research Performance dashboard
Past performance does not guarantee future results. Nothing here is investment advice or a recommendation to buy or sell securities. Returns use LF0’s daily-close scorecard methodology.
Leave a Comment