This Stock is Too Cheap to Ignore & Could Outperform the S&P - Here's Why

Get access to my portfolio & more content by joining my Patreon!

Get my book, The Fundamentals of Investing on Amazon!

join thousands of investors who have improved their returns with Stock Unlock:

Canadian Investors Can Follow My YouTube Portfolio for FREE On Blossom:

Hello everyone, I am Daniel Pronk and in today's video we do a deep dive on Evolution Gaming stock, EVVTY. This stock looks like it could be significantly undervalued in the market right now, and in this video I explain why.

Disclaimer: Before we dive into this discussion, I want to make it clear that I am not a financial advisor, and nothing I say is intended to be a recommendation to buy or sell any financial instrument. All trading and investing activities must comply with the regulations set forth by the Securities and Exchange Commission (SEC). I will never ask you to send me money to trade for you, and if you come across any suspicious emails or fake social media profiles claiming to be me, please report them immediately. Additionally, it's important to remember that there are no guarantees or certainties in trading or investing, and you should never invest money that you can't afford to lose. While my videos may contain affiliate links or sponsorship to products I believe will add value to your life, it's crucial to conduct your own research before making any financial decisions.

[danielpronk]

Join my Patreon to get access to my personal portfolios, all my buys and sells, exclusive stock picks and analysis, my Discord community, and more.

You can also save 10% by becoming an annual member!

[agentjacob]

This year is going to be worse than the last, no doubt about it. Due to poor investment decisions that I would not have made if I hadn't been so concerned about my portfolio, I lost a significant amount of money last year. I'm curious how senior citizens manage to function in such an unstable setting.

[grizzlephotovideo]

The moat, IMO, is akin to Netflix’s moat which is the barrier to entry into this market. Like Netflix, EVO has a huge head start in their respective market and are already profitable while other companies (like Disney has proven) would have to hemorrhage cash for years to try to scale up enough to be profitable. So for brick and mortar casinos, for example, it’s just way easier to let EVO handle the online casino as they start off being profitable from the get go (sharing the profits with EVO 70/30), rather than hemorrhaging cash for years to try to build their own online version in the hopes of catching and taking share from EVO.

[christophenour]

Evolution is my favorite pick right now. Everything is priced in, and the company continues to grow profitably. Yes, US expansion is dragging margins down. Yes, new hiring is increasing costs. But this was to be expected. Despite these short-term costs, the 2024 guidance remained steady so we should expect a rather strong H2 2024. Great video Daniel!

[salinagauntlett]

I will be forever grateful to you, you changed my entire life and I will continue to preach on your behalf for the whole world to hear you saved me from huge financial debt with just a small investment, thank you Charlotte Miller.

[shilpam]

@danielpronk, can you pls let me know your thoughts on PINS stock at current price?

[larse]

Great analysis, thanks! An absolute gem.

[Shayden]

Awesome find! I'd love if you could make a follow-up video once you analyzed the moat and decided whether you'll add it to your portfolio or not.
Even if you don't add it, it would be informative to hear your analysis.

[darunes_]

Hey Daniel, would be great if you added whether or not management has a history of "sandbagging" their guidance whenever you do these type of videos, i.e., do they typically underpromise and over deliver, or do they miss their own targets? In such a way, it would support the competence of management and enhance your bull case. Great video!

[annasillanpaa]

Thank you! I don't know about the competitors, but I think there are some pending law suits in the US etc. I think they are probably not so major as the company is also buying its own shares. Also I think this company is not included in the ESG index funds & ETFs? If so, that will impact the share price in longer term. In any case, I think I will invest a relatively small portion. I have quite distributed portfolio in any case.

Other thing, any views on Crowdstrike? It's down 30% so maybe time to invest in it when the free fall ends?

[grantp]

Great deep dive video on this company Daniel, and it may be a great buy ? A couple
well run companies I'm watching that are down are LULU / CELH - Celcius beverage
company, that's growing very fast. Maybe you could do a video on those. With these
increasing revenues and cash flows this Evolution company has seen it's stock value
continually in decline over the last 2 years, when you'd think it should be going up ?? You
have to be careful with a stock like this in my opinion.

[blizzy]

looking forward to further commentary on this company

[davidp]

I love the way you approach businesses.

[danieeel]

As a investor in Evolution since 2016 I just want to make one thing clear about what owning EVO is like. On paper it's almost a 10/10, and pretty much the only down side is the regulations and or funds leaving an (for some) considered unethical market, but then not much happens, mostly becuase It's a hugely controlled by traders. Them leaving the stock on the swedish stock market is to me a major mistake because the traders have such a huge cut of the daily revenue. Eventually things correct themselves, but long term investment is required for sure.

[shanelarking]

Hi Daniel, i added this to watch list, the margin to go long is 100.00 and 110.00 to short, does this mean interactive brokers think it's going be volatile

[realestalex]

General Electric is going to be interesting, the spin off is one of the best thing that could have happened to aerospace engineering lately

[ToTheNines]

But Daniel what is the bear case? Why is the market so down on the stock? There must be a reason, does not have to be a good reason, but the market must be bearish on it for some reason.

[sebbeisbackintown]

As of now EVO is listed on the OTC and OMX. A listing on Nasdaq for example would be a huge catalyst for potential gains in the future.

[LordCorwin]

Some regulations might suppose less revenue and earnings. For example, in my country you could build small casinos easily. After the 2008 crisis, you could find them everywhere (I suppose when there is a crisis, people tend to use them more). Then a new regulation came stating the overall casino density per neighbourhood and prohibiting any casino less than 300m of any school. This regulation was fantastic for the people living these areas, but bad for the companies owning them.

[aspirashun]

daniel. i am concerned that this stock is otc stock. why is it not on nasdaq or major exchange? i got burned by few otc stocks. especially trueleaf. pls address its otc status