Postos
38A Evolution divulgou documentos relacionados com a sua Shareholders Meeting de 2025, a qual vai realizar-se no próximo dia 9 de maio. Os documentos contêm um conjunto bastante variado de notícias, que tocam nos seguintes pontos:
1. Retorno aos acionistas;
2. Novos incentivos;
3. Limitações do Conselho de Administração;
4. Propostas dos acionistas.
🔎 Se quiseres saber mais visita a análise completa em: https://dalemcapital.substack.com/p/evolution-evo-reuniao-de-acionistas?r=5b4g28
"The Board will endeavour to distribute excess cash in the most value enhancing way possible.
There are times when repurchases of own shares are more value enhancing and there can be situations where extra dividends are preferred. In those cases, the Board may decide to pay a special divided which will be decided upon at the Annual General Meeting or at an Extraordinary General Meeting. "
"We aim to be in a net cash position over time, with an ability to deploy modest short term leverage for unique shareholder value enhancing opportunities.
We are a highly profitable business as a market leader with a best-in-class product in a growing global industry, supported by strong long-term secular tailwinds.
Our first priority will be to invest in growing our existing business organically."
A Evolution AB é líder global no fornecimento de soluções de casino online ao vivo, com um modelo de negócio altamente escalável, margens operacionais acima de 60% 📈 e uma capacidade excecional de geração de fluxos de caixa 💰. A empresa tem beneficiado do crescimento estrutural do setor de jogos online e reforçado a sua posição através de inovação contínua 🚀 e aquisições estratégicas 🤝.
🧠Principais pontos a ter em consideração:
- Liderança de mercado com quota estimada de >30% a nível global e >50% na Europa no segmento de live casino, com forte reconhecimento de marca e vantagens competitivas sustentáveis;
- Elevada rentabilidade, com margens líquidas superiores a 50% e retorno sobre o capital investido (ROIC) acima de 29%;
- Estrutura financeira sólida, com posição líquida de caixa (€693M em 2024) e forte capacidade de reinvestimento e distribuição de capital ao acionista;
- Valorização atrativa, com um valor intrínseco estimado muito abaixo do valor de cotação atual;
- Política ativa de retorno ao acionista, com dividendos e recompras de ações que totalizam ~8,3% de yield anual;
- Riscos controlados, com exposição regulatória relevante, mas mitigada pela diversificação geográfica e por práticas robustas de compliance;
A $EVO (+0,99%) tem demonstrado uma execução sólida, disciplina na alocação de capital e um compromisso com a criação de valor para o acionista. Dado o seu perfil de crescimento, margens acima da média do setor, forte geração de caixa e valuation atrativo, a Evolution apresenta-se como uma oportunidade interessante de investimento 📊💼.
🔎 Se quiseres saber mais sobre esta oportunidade de investimento visita a análise completa em: https://substack.com/@dalemcapital/note/p-159707572?utm_source=notes-share-action&r=5b4g28
My goal is to beat the market, I'm still relatively young and want to see if I can do it, if not I'll put everything in an etf in 5 years.
Regarding my portfolio, I currently have a cash ratio of 23-25% depending on the fluctuations in the last month.
Purchases of existing stocks:
I plan to increase the financial stocks by 50%, $CG (+1,35%)
$KKR (+0,3%)
$APO (+0,21%)
$TPG (+0%) .
In addition, a little $DMP (+1,99%) by 25%.
Sales:
I made the mistake of wanting to $EVO (+0,99%) and $CPRX (+0,69%) trade, but then I was too greedy.
I am convinced of both positions in the long term but not in this size in the portfolio, which is why I will reduce both stocks by 33%.
Potential purchases:
$HALO (+2,29%)
$CUV (-0,28%) - Will invest a little extra, otherwise just the 33% from sale of $CPRX. Both around 50 - 50
$SL (-0,7%) - the same as $TISG (-1,05%)
$KSPI (+1,28%) - about as high as $MUM (+2,93%)
$FIH.U (+1,39%) - about as high as $MUM (+2,93%)
$2GB (+1,56%) - about as high as $MUM (+2,93%)
$M12 (+2,42%) - about as high as $MUM (+2,93%)
$CPR (-1,68%)
$DGE (-1,34%)
$RI (-0,82%) - I'll wait and see, but I can imagine that they will develop in a similar way to the tobacco shares. Since I don't want to decide, I'll just buy three for the sum of one. And divide the amount between these 3.
In general:
I'm generally a fan of putting together baskets like with alcohol or the yacht builders.
What would you change because you see a high risk? I am relatively poorly positioned in the tech sector, do you have any other titles that I could take a closer look at in this area?
Even though I am generally very positive about Evolution, the opportunity cost is getting higher and higher, especially now that many other shares are also on sale. I am currently -25% down (with costs). Unfortunately, I don't see the share making up for this any time soon and waiting for the dividend is a zero calculation given the lack of momentum. All the good news, such as strong demand in the Brazilian market, US expansion, share buybacks and good prospects for powerful compensation are not at all reflected in the share price.
I mean Buffet once said that an excellent company is not necessarily an excellent share. And that seems to be the case, at least for the moment, with Evolution. How do you see that?
I also want to consolidate my portfolio somewhat.
Grab the popcorn 🍿 $EVO (+0,99%)
On March 7, 2025, a judge in New Jersey ruled that the identity of the mysterious individuals who published a report in 2021 that made serious allegations against Evolution must be revealed. At the time, this report led to a multi-billion dollar collapse in the share value of Evolution, a leading provider of live casino services. The judge rejected a request to delay the disclosure, which means that the original deadline will be met and Evolution should learn the names on the same day. Following the disclosure, Evolution can continue with its defamation case, in which the company is seeking billions in compensation. According to sources, a major online gaming company is said to be behind the report, further fueling speculation about the motives.
https://next.io/news/casino/mystery-evolution-accusers-unmasked-today-nj-judge/
What are the current problems?
Margin compression
slower sales growth
Asia
ESG
1. margins
Why is the margin falling?
$EVO (+0,99%) The company is expanding into the American market, and to do this they have to open a studio in every state in which they offer their services. It is much more expensive to build and maintain studios in the USA, and the cost of staff is higher than in the usual Eastern European studios. In the course of expansion, this will ensure that margins will fall for the time being.
When will the margin rise again?
The expansion into the USA has the same reason for Evolution as for all other companies: the US consumer simply spends the most money. This also applies to games of chance. Although the expansion is initially associated with higher costs, the higher stakes should ensure that margins improve significantly in the long term. I am assuming a maximum time frame of 30 months until the expansion is fully completed. The margin will probably fall to around 60% before rising again in the long term.
2. sales growth
The most important scaling element for Evolution is new gaming tables. The markets outside the USA are almost completely developed, which means that hardly any new tables are being added. If fewer new tables are added, Evolution is dependent on the market itself growing. The market is expected to grow by around 6-12% annually, meaning that Evolution is growing even faster than the market. The explosive growth in turnover in recent years has resulted from the rapid expansion of Evolution. Like the margin, sales should improve strongly with the US expansion. I expect this to take about 8-12 months.
3 The Asian market
Since April, cyber attacks on video production have meant that sales (in what is currently the largest market) have stagnated. In my opinion, it is not really clear when this problem will be solved. A weakening Asian market will also put pressure on margins. The fact that Evolution is taking so long to resolve the problem exudes enormous uncertainty, which the market is known to dislike.
4TH ESG
Like tobacco, gambling is a sense sector that is screened out by ESG criteria, which means that institutions largely ignore no matter how cheap the company appears to be. The situation only changes when there is enough momentum that the potential return can no longer be ignored. Anyone involved in the tobacco sector knows this only too well. If ESG is (hopefully finally) abolished, this will be one of the biggest long-term catalysts for $EVO (+0,99%) .
Conclusion
I think it is self-explanatory that a company that grows about 10-15% annually, has no debt, buys back shares, is the absolute market leader and has fantastic margins does not deserve a P/E ratio of 13.
Expectations that Evolution will grow by 30% a year forever are absolutely unrealistic and that the company will be punished for the unrealistic expectations of investors always proves to be nonsensical.
The focus on medium-term margin compression rather than the extremely important expansion into the USA is also more than irrational. If Evolution expands into the US, they practically have a monopoly and the high barriers to entry (as openly explained) create a wonderful moat.
