TSXV:NYX.DB - Post by User
Post by
maypeterson Aug 23, 2016 6:00pm
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Post# 25169703
Nuttall Fund commentary
Nuttall Fund commentaryEric should be on BNN the day after results come out .. the following is from his small cap fund commentary in July
NYX Gaming is a software company that produces content for online gambling sites and after their recent purchase of OpenBet has become the largest sports book operator in the UK. Despite organic growth rates exceeding 30%, a market that is growing by 10%, targeted EBITDA margins of 40%, and a forward P/E of 8.4X, the market is ignoring the stock largely due to the stink that has been placed on the sector from another online gambling company whose CEO is currently being accused of insider trading. Once this issues passes, we believe investors will return to the space.
This catalyst should also benefit Intertain which operates online bingo sites. The stock is trading at a 20%+ free cash flow yield and has reported several blow out quarters. Due to the lack of stock market following, the company is currently undergoing a strategic review (ie. possible sale). In our opinion, either the company gets sold at what we estimate would be a ~$15+ price (50% upside) or they will list on the UK exchange where its peers trade at over twice its current valuation. Either way, with the stock trading at such a distressed valuation despite strong fundamentals for it and its industry, we believe the risk/ reward is very much in our favour.