Evolution AB

Share prices are rising, the search for favorable companies is becoming more difficult.

Only $EVO (-1,33 %) currently remains cheap - now at a P/E ratio of 15 (!). Explanations welcome. I am aware of the strike in Georgia, a few unpleasant stories from some managers and the latent Asian threat.

But even if growth halves, we are at >10% p.a. for a market leader with a large gap to the competition.

Earnings are due in January. I would prefer to go in leveraged before then if the share price remains as it is now.

But I haven't found anything except pure options. Does anyone have any tips?

After the last figures it went up 20%. I can well imagine that this could happen again at this low level.

What do you think?

"You would never invest in a company that exploits the addiction of its consumers, would you?" JD Vance has nothing to do with it

What other companies are involved?

$EVO (-1,33 %)
$MO (+0,78 %)
$PM (+0,48 %)
$BATS (-0,24 %)

Does anyone here have experience with Swedish dividends on Trade Republic? I have read that some brokers automatically reduce the Swedish withholding tax to 15% in advance. Since TR does this for US stocks, I would be interested to know if this also applies to Swedish stocks and you can save yourself the refund applications. I have searched the internet and TR's FAQ without success.

I am asking because I am considering $EVO (-1,33 %) adding them to my portfolio.

I simply had to strike again.

New addition to the depot: $PSTG (+2,39 %)

And additionally purchased:

$EVO (-1,33 %) (position full for now)

$BTC (+0,08 %) (unfortunately not yet 1 full)

Red prices are a starting signal. The first tranche goes in. I had built up cash for this scenario, even though I have to admit that 2 weeks ago I almost got impatient and wanted to liquidate the first part.

Unfortunately, I was only able to submit my transactions after work and wasn't able to take much of the rebound with me.

I used to look at the charts and think: "If you'd got in X months ago, the share would have hit a real low."

But when lows come, everyone cringes and stands on the sidelines...

For me, the golden question is the rule of thumb: Will the company be in a better position in 10 years' time than it is today? If so, you can start going in.

And for those who are interested in my new addition Pure Storage (I don't think there will be many, because it's a tech stock and not NVIDIA) in a nutshell:

They make very efficient storage solutions for data centers. They are currently still running with old hard disks, expensive and slower. The transition to modern technology is slowly beginning, and Pure Storage offers a complete solution.

My shovel manufacturer, which is supposed to take the money from the hyperscalers.

$

Now available for a P/E ratio of 17.

What the ESG bubble doesn't want, I'll gladly take.

Dividend currently at 3%, 50% payout ratio.

Could be increased to 4% by 2026.

Gambling may be sinful, but if mankind has been into it for 1,000 years, it would also be a sin not to offer it.

If the casino always wins, why not invest in the shovel manufacturer for casinos?

By the way, I have looked more deeply into the unregulated revenues that are currently causing a discount. Evolution has no direct business relationship with the end customer.

They can hardly influence which (mirror) sites customers then use to consume their products.

An investigation in the USA as a result of the Short Report was recently discontinued and nothing was found.

Of course, there is still a certain risk in Asia. A P/E ratio of between 20 and 25 is actually appropriate in my opinion.

But of course this is not an investment recommendation, everyone has to decide for themselves whether this is right for them ;)

Additional purchase of one of my top shares.

Market capitalization: € 21 billion

Sales growth: 21% estimated

Highly profitable.

Market growth: 15% p.a.

Dividend yield of 2.7% with 50% payout.

And all of this is currently available for a valuation of 18 PER.

Normally, I see shares with this kind of growth in valuation ranges above the 30 P/E ratio.

Why is that?

$EVO (-1,33 %) is in the online gambling business.

They are active in the B2B sector and supply the games for various gambling providers with which customers can put their luck to the test.

Not ESG-compliant and therefore excluded from the portfolio of many funds.

I see good growth potential, as online gambling currently only accounts for around 5% of the overall gambling market. But it is growing strongly. A lot of tailwind for $EVO (-1,33 %) the next few years in my view.

Risks can be seen in the regulatory environment, although Evo says it is only indirectly affected due to its B2B positioning. I can understand that, but it could still cause the share price to fall.

In my view, however, this in no way justifies such a valuation discount.

I would therefore be interested in your opinion:

For those familiar with the share:

• Can you explain the low valuation?
• What am I missing?

For those not familiar with the share:

• Is gambling really such a taboo investment?

In my opinion, gambling is probably one of the oldest trades in the world. Humans have a gambling instinct - in my view, it is legitimate to create offers here (in a regulated environment).

Your Money Man

$EVO (-1,33 %) (Evolution Ab) position.

After I bought the first small tranche 2 years ago at € 74.67, the position will be increased again and thus also made more expensive.

P/E 2024 -> 18.5x / cash flow yield 5.7%

P/E 2025 -> 15.8x / cash flow yield 7.2%

15-20% growth expected