NYX Gaming Group Ltd (NYX.V)

Doesn’t own any of the stock, but owns some of the convertible debentures. Their business has been pretty good, but unfortunately they are being lumped in with the Amaya’s (AYA-T) and Intertain’s (IT-T) of the world. It needs to put up a couple of nice, solid quarters, where the market really recognizes that they are growing their cash flow and revenue. At that time, they will probably be valued on their own, versus being lumped into that group. Wait for a quarter or 2 and then get involved.

This has been slowly coming off the lows and is now at $2, which is still well down from where it was earlier this year. At $2, it is trading at about 18% free cash flow yield. Looking out, that is like 10X earnings on 2017, highly inexpensive relative to the underlying business fundamentals. An industry that is growing an organic rate of about 8%-10%. It is just going to take some patience.

(A Top Pick Oct 22/15. Down 21.65%.) There is a stink in the industry due to Amaya and Intertain, and then you’ve got this little company that made a transformational acquisition of Open Bet. Prior to that, they had been posting organic growth rates of about 30% top line. The industry is growing at a minimum of 10%, and this company is growing at a premium to that.

He used to own this, and it didn’t work out well. The whole sector seems to trade in line. He just gave up on management. It has been a rough patch for them in the last 2 years. He has better places to put his capital.

This whole sector has come under scrutiny. It used to be the hottest sector in town. They are a dealer so they provide games to other companies. They made some acquisitions. Multiples have compressed. He likes the management and thinks people will eventfully reward them with higher multiples.

This is a company with the best product in their space, a space that is growing at 10%. Last quarter they organically grew by almost 30% plus you tack on acquisitions. It is mired by a stink due to 2 other companies, which are hopefully going to go very soon. Their next quarter is in November which will be the 1^st clean quarter where you won’t have M&A noise and be up to fully assess their organic business and their recent acquisition. Trading at less than half its peer multiple, despite having stronger growth rates, and at an almost 20% free cash flow yield. Has the best software in the business, and yet is trading at around 7X next year’s EBITDA. At 9X EBITDA, this is a $4 stock, about 100% upside from here.

(A Top Pick Aug 19/15. Down 27.45%.) There has been a lot of noise from a lot of different things. Made some acquisitions in the UK. He no longer owns them, but owns their convertible debentures. Longer-term, this still looks fantastic. Management owns a big part of the company.

(A Top Pick Sept 15/15. Down 36.39%.) (A Pairs trade. Long NYX and Short Amaya.) The CEO had announced plans to take this private, and he was dubious on their ability to do so.

This does software for Internet gaming. It has been a bit of a casualty of BREXIT. Did a really big acquisition last year of a UK focused company, and the currency has been really devalued by that. Had taken on a lot of debt to do the acquisition, but cash flows have been hurt a little. It is hard for analysts to see what the business looks like in a steady state. The market is looking for some clean quarters.

(Market Call Minute.) This got hit with Brexit, but the CEO has been buying, so this would be more of a buy right now.

A frustrating stock this year. He has been averaging down. There were sellers this week that had had enough of the space and were selling. The CEO was a buyer a few days ago. It is a liquidity problem. The only thing that has changed is the share price. The space is growing at 10% and they are growing more than that organically.

Doesn’t like this at these levels. They did a $500 million acquisition when the share price was over $3. The market didn’t like the deal, but the stock started to rebound close to $3 again, and then they announced another tiny deal. Feels the whole sector suffers from management issues. He is fed up with the sector.

It has a gaming platform and helps out other sites. We have got a bit overwhelmed by the whole Canadian gaming industry. He can think of other better stocks to be in.

Just finished a $500 million acquisition of the largest sports-book gambling software company, Open Bet. This transforms the company, and gets them into a way better league with which they can compete against other casino gambling software companies. The stock has been hammered in the past due to scandals at Amaya (AYA-T). Other than Amaya being a customer, they have no relationship. This is a business with 30% organic growth, plus the upside from the new business they have acquired. This industry is growing at 10% per annum and generating gobs of free cash flow. Trading roughly at 7.2-7.4 times next year’s EBITDA compared to others trading at 12-14 times. On his calculations, he is getting a $4.40 share price, but thinks it can do better than that.

(A Top Pick May 20/15. Down 43.37%.) Investors haven’t liked this sector too much, and until just recently, they weren’t as profitable as they would have liked. This was because of one division that they will be selling.