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Traders Workshop

iGaming – Stock Prices

Companies / Investing 2017 Jul 19, 2017 - 02:55 AM GMT

By: Submissions

Companies

Daniel Hult writes: Investing in iGaming companies
The gaming industry is an attractive prospect for investors. Since the emergence of online casinos, we have seen plenty of successful IPOs. The global trend today is that the market is consolidating, and this goes not only for UK, but also for Nordic gambling companies. As these companies are less known to us, it could be wise to investigate the most popular Scandinavian iGaming companies to invest in.


In this article we will go through the hidden gems – the listed casino and/or betting companies that haven’t received the publicity they deserve. We’ve selected three investor picks that we believe can build a good iGaming investment portfolio.

MrGreen

Prefer a strong gambling company focusing on one brand only? While most iGaming giants select to go with multi-brand strategy, MrGreen (MRG) puts all its effort into Mrgreen.com site. The company also runs the Garbo.com brand. Its size, in relation to the main operator site, is however, not enough for MrGreen to be called a multi-brand gambling operator.  

With a market cap of around £150M, the company is considered to be a medium-sized gambling operator. Offering a stable share price, most often ranging between 35 and 40 SEK, there is a clear potential for growth.

As the iGaming industry is in the consolidation phase, MrGreen might need a strong acquisition and an increase in the number of employees in order to keep up with the industry leading operator companies such as Kindred (Unibet) and Betsson. Currently, MrGreen has slightly over 200 employees, which is a mere 11 per cent of Betsson’s man power.

We believe that buying these shares would be a safe bet, as this will either increase in value or remain on the same level, as has been the case since the IPO back in 2013. Another possibility is that MrGreen gets acquired by a strong global actor that wants to get into licensed markets, mainly in Northern Europe. We believe that all of these scenarios make your investment into MrGreen’s shares a great deal.

Catena Media

Our second choice is obvious – Catena Media (CTM). Their IPO has been amongst the most successful in the history of iGaming. With SEO as their main focus, Catena has re-written a history of what a great gambling company should be like. However, many investors were too skeptical to buy their shares back in February 2016, when the company’s shares started trading.

Catena Media has now proven that the concept is here to stay and is good enough for the stock exchange. It is all about marketing, SERP and buying the right assets to stay ahead of competitors. Catena has quickly tripled its market value thanks to some strong acquisitions. Their market cap is around £400M and the sky seems to be the limit, as company management is still on the lookout for acquisitions. 

Gaming Innovation Group
Yet another great Nordic company that is worth your attention is Gaming Innovation Group (GiG). They are approximately of the same size as Catena Media and have experienced a tremendous growth during last two years.

Robin Reed (CEO of Gaming Innovation Group) has, according to forum rumours, discussed potential synergies of GiG and Catena Media during his Facebook broadcast.

It would be no surprise for the industry if these two successful companies create a new global gambling giant by merging together. A company called ‘Optimizer Invest’ plays an important role in both GiG and CTM and the relationship between those two is already quite good. Both companies have offices in Malta and Marbella. By merging, a new group would most likely get a market cap that exceeds Betsson Group’s, making this new player second largest gambling company in Scandinavia, behind Kindred.

By Daniel Hult

© 2017 Copyright Daniel Hult - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


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