NYX Gaming Group Ltd (NYX-X)

This is being taken out with a cash offer. It had a big jump after the deal was announced. If you own, you could sell into the market right now, or wait until the cash offer comes through.

It has been doing well lately. There as a takeover bid for it at 105% premium. He owns a lot of it. He has not sold yet . He prefers to hold on to it. He will still get a little bit if he holds it and someone else may come in to bid higher. He would rather hold it.

(A Top Pick Aug 30/16. Down 39%.) An example of a management team that does a big acquisition with very lofty goals of revenue and margin growth. Execution became a little more difficult than they thought and they disappointed the street, so the stock got hammered. They’ve had 3 quarters of not meeting expectations. At this point, it is a “show me” story.

This has been growing fairly well, but certainly hasn’t worked out quite as well as management hoped. The market has been disappointed by the progress. The most recent quarter was disappointing for the street. He continues to hold this. Any time it dips down to the $1 range, he buys stock back because longer-term it is going to continue being a growth business and bringing on more customers. As they rationalize all these transactions, and strip all the fat out, it will start to fire on all cylinders. You may have to be patient for a while.

An online gaming company. A very cheap company. They’ve made acquisitions and ramped up their debt. The stock should be acting a little better in terms of fundamentals. The whole sector has dropped in valuation. This company is not that well known and not that well followed, and the stock has really not done that well at all. Thinks the company is okay and that it has potential and a high growth rate, but you can buy the market leader Amaya (AYA-T) at 8X earnings. In and of itself, he thinks the company is okay.

(A Top Pick May 27/16. Down 57%.) He liked this because it was on a hyper growth trajectory in an industry that was growing by 10%-15% organically. This hasn’t been a revenue problem, it has been an expense problem. He would not commit new capital towards this.

Doesn’t have a lot of confidence in management. They’ve disappointed investors since they’ve been listed. He likes the exposure in terms of the online gaming sector, but it just hasn’t worked out and he doesn’t see that changing anytime soon.

A difficult one to figure out. There are a couple of reasons why this is not moving. With the exception of recent news, the sector really hasn’t had a lot of interest and most investors have backed away from it. Also, being a smaller company, also hurts it. It looks like some of the acquisitions were a little bigger than they expected, as far as the amount of work needed to turn it around. He suspects they will end up with a quarter that will exceed expectations, and the stock will take an immediate jump, and if it gets a 2^nd quarter where numbers are trending in the right direction, the numbers will be back to where analysts/portfolio managers think they should be.

He used to be a “Long” shareholder and lost money. Eventually got fed up with management and got out of the stock.

This sector has definitely had the wind in its face for the past year. The fact that this came out of Amaya (AYA-T) is an issue. Management has done a fantastic job of executing. They’ve probably bitten off a little more than the market wanted to see in the last 2 transactions. If there is a quarter or 2 of better numbers, the stock is probably going to have a fairly good move. From a valuation standpoint, this certainly seems reasonable.

A very cheap company with good potential. Unfortunately, it got caught in the whole Amaya (AYA-T) - Intertain (IT-T) Short Sell scenario. There is a valuation opportunity here, but it’s not risk free as there is some debt. Regulations still have to be decided in North America. He likes it, but only because of the valuation. Their fundamental earnings have been quite decent over the past couple of quarters.

Lost a lot of money on this. Had thought it was a lower risk way to play the online gaming space. He liked that they were providing the back office and the systems as opposed to the games themselves. Bailed on this about 4 months ago, as he had lost faith in management.

The whole sector has been soft over the last year and a half, then there was bad news today. The problem is sentiment overall. Their costs are up and it is hard to know why. He has a very small position. Don’t add to it but keep an eye on it. There may be tax loss selling and a bounce into January. He would like to see fundamentals improve.

Just reported, which was followed by a significant drop off in share price. Had owned this in the past and continues to watch it. The market wants to see them translate revenue into EBITDA, and expenses have been a little high. There is probably some tax loss selling. These are the guys that are really selling the picks and shovels in the gaming business. They are building all the games that basically all gaming companies use. Made a lot of acquisitions recently, and the market wants to see how those shake down, and how it flows through to EBITDA. Ranks weak technically and fundamentally in his process.

An interesting company at these levels. It has been hit quite hard. Also, the takeover of Amaya didn’t help the sector. A lot of investors are fatigued with what has gone on. They did a good acquisition. There is good potential and it is very cheap. The question is, how long do you have and what is your risk profile level.