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
