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Is Red Rock Resorts (RRR) Trading at an Attractive Valuation?

Soumya Eswaran
·2-min read

Diamond Hill Capital, an investment management company, released its “Small Cap Fund” first-quarter 2024 investor letter. A copy of the letter can be downloaded here. The market delivered positive returns in a volatile first quarter across most regions. Diamond Hill Small Cap Fund outperformed its benchmark, the Russell 2000 Index, in Q1 and returned 7.11% while the benchmark return was 5.18% during the same period. In addition, you can check the top 5 holdings of the fund to know its best picks in 2024.

Diamond Hill Small Cap Fund featured stocks like Red Rock Resorts, Inc. (NASDAQ:RRR) in the Q1 2024 investor letter. Headquartered in Las Vegas, Nevada, Red Rock Resorts, Inc. (NASDAQ:RRR) develops and operates casino and entertainment properties. On May 13, 2024, Red Rock Resorts, Inc. (NASDAQ:RRR) stock closed at $50.22 per share. One-month return of Red Rock Resorts, Inc. (NASDAQ:RRR) was -14.67%, and its shares gained 11.96% of their value over the last 52 weeks. Red Rock Resorts, Inc. (NASDAQ:RRR) has a market capitalization of $5.168 billion.

Diamond Hill Small Cap Fund stated the following regarding Red Rock Resorts, Inc. (NASDAQ:RRR) in its first quarter 2024 investor letter:

"On an individual holdings’ basis, among our top Q1 contributors were Red Rock Resorts, Inc. (NASDAQ:RRR) and Lancaster Colony Corporation. Local casino operator Red Rock Resorts delivered a strong opening for its new Durango Casino & Resort. Importantly, the new resort didn’t seem to cannibalize results from the rest of the company’s portfolio. We maintain our conviction in the underlying fundamentals and believe the current valuation remains attractive."

A picturesque sunset view of the Graton Resort & Casino, with patrons gambling in the background.

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Red Rock Resorts, Inc. (NASDAQ:RRR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 15 hedge fund portfolios held Red Rock Resorts, Inc. (NASDAQ:RRR) at the end of the fourth quarter which was 17 in the previous quarter.

Baron Focused Growth Fund stated in the previous letter that Red Rock Resorts, Inc. (NASDAQ:RRR) rose in the quarter as it reported a strong opening for its new Casino. By 2026, Red Rock Resorts, Inc. (NASDAQ:RRR) anticipates a 20% annualized return on capital for its $800 million investment. In addition, please check out our hedge fund investor letters Q1 2024 page for more investor letters from hedge funds and other leading investors.

 

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Disclosure: None. This article is originally published at Insider Monkey.