Bragg Gaming Group (BRAG.TO)

BRAG is getting on the small side now with a sub-$100 mln market cap while growth has begun to flatline at 4% revenue rowth expected this year while earnings are negative. They also recently cut their guidance. We would give this name time to show a bit better price momentum before getting interested. 
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On Wednesday, Mr. Jeremy Raper of Raper Capital issued an open letter to Bragg Gaming, requesting the company to consider the immediate pursuit of strategic alternatives, including a full or partial sale of the company. Mr. Raper is self-reported to own 375,000 shares of Bragg (~1% of shares outstanding), representing the second-largest disclosed non-insider investor of the company. Last week the President and COO said she would be resigning, so the company is in a bit of turmoil. The stock rose 24%. But, just because a shareholder is making waves doesn't mean the company will be sold. It has grown revenue and is now cash flow positive, with earnings expected next year. The stock is up 48% YTD, though massively down from its 2021 high when everything soared. It has a clean balance sheet with a bit of net cash. The outlook we think is decent. We like the gaming/gambling sector. As a small company its stock has done OK considering the weakness across the sector. The jump we think is a little overdone, as nothing in fact may happen. The company has no obligation to a disgruntled shareholder owning 1%. But we would consider it a decent small cap today, regardless, and this event may attract more interest to the company. 
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Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. Their latest earnings showed revenues growth of 9.9% year over year. The results were better than expected, though the company is still not profitable. They should be profitable in 2022. Guidance was raised. Very little debt and if sales momentum continues, it can do well. Unlock Premium - Try 5i Free