In comparison to the rest of the market, the year 2020 was possibly the most unusual for the casino industry. While some stocks reached new highs, others fell to new lows. Last year, gambling companies like Wynn Resorts, Las Vegas Sands, and Melco Resorts underperformed and lost value in the general market.
On the other hand, investors bet that online gambling companies such as DraftKings and Penn National Gaming would expand at the quickest rates of any shares in the sector. As a result, the shares of these firms are now worth more than three times what they were a year ago. Unfortunately, expectations for online gambling stocks may have been excessively high.
Beginning in 2021, the reopening of land-based casinos is expected to lead to a general drop in the value of online gambling enterprises. Is it thus still a smart idea to invest in online gambling when stock values are falling?
Accept the Risk of Investing
Should you invest if the stock market is in decline? The right answer is yes. Always bear in mind that the ultimate purpose of your investment plan should be to help you reach your financial goals. As a result, regardless of the status of the market, it is critical to keep a constant eye on the stocks.
An illustration would be as follows: if a pair of shoes were on sale, you would undoubtedly purchase them to benefit from the savings, right? As a result, we shouldn’t anticipate stocks to act differently. When stock prices are declining, it may be a good time to buy. For seasoned investors, the expression “sell high, buy low” acts as a guiding concept.
Your degree of financial stability should serve as the foundation for your investing decisions. It should not be determined by how the market is performing. Becoming overly excited about stock purchases at the right moment can be just as dangerous as getting overly excited about stock sales at the wrong time.
It’s a Good Idea to Check Out These Top Online Gambling Stocks
When the outbreak forced land-based gambling establishments throughout the world to close or postpone operations, online gambling companies stepped in to help a large number of consumers who would ordinarily gamble at a genuine casino. Even though brick-and-mortar casinos are reopening this year, many customers still choose to wager online. The following is a list of stocks to watch in the online gaming business.
DKNG (DraftKings)
DraftKings, Inc. is an online entertainment and sports gambling company that offers its users the ability to participate in online casino games, daily fantasy sports, and sports betting. DraftKings is getting closer to profitability, according to IBD figures.
Following a loss of $3.26 per share in 2019, the company lost $2.76 per share in 2020. According to industry estimates, the company will lose $1.42 in the current fiscal year and $1.00 in 2022. In the backdrop of the sports betting industry, the long-term prospects for DKNG stock seem bright.
The firm’s potential gives investors many reasons to be optimistic. Even though the company is not yet profitable, DraftKings is the market leader in online betting. The firm is also seeing rapid sales growth. DraftKings has also expanded into the casino gaming business, adding to the company’s diversification.
GNOG (Golden Nugget Online Gaming)
Golden Nugget Online Gambling, Inc. is a company that focuses on online gambling as well as digital sports entertainment. It provides its users with access to a variety of casino games as well as live sporting events in Michigan and New Jersey.
GNOG shares tumbled as high as 12.6 percent after the business revealed its financial results for the fourth quarter of 2020 on May 19. During the fourth quarter, revenues grew by 48 percent to a total of 23 million dollars, according to the firm. Furthermore, Golden Nugget Online Gaming reported a $6.2 million profit before taxes and interest after factoring for factors like amortization and depreciation.
The quarter had a net loss of $42.8 million, which was to be expected given the substantial expenditures involved with the SPAC purchase. Golden Nugget Online Gaming is most likely one of the world’s smallest enterprises functioning today. As a result, it will need to swiftly extend its operations and increase in size to gain a respectable share of the market.
As a result, Golden Nugget Online Gaming remains a promising company if you are willing to hold onto GNOG as an investment for the long term and can withstand the volatility.
NGMS (NeoGames)
The price of NGMS shares increased when the online lottery operator reported 2021 expectations and 4Q results that exceeded the consensus forecasts. This was NGMS’s first financial report as a public business, and it resulted in the company going public. The company announced an adjusted profit of $9 million, based on gains made before depreciation, amortization, taxes, or interest being applied to those gains.
NeoGames’ primary revenue stream is dependent on the same aspects as iGaming and sports betting, even though online lottery does not generate the same level of excitement as those two types of online gambling. This includes an increase in the number of states that have legalized marijuana.
A Few Final Thoughts
It makes little difference which asset related to online gambling you decide to put your money into; the main thing you are gambling on is whether or not the stock price will keep going up over the long term. Even though land-based casinos are starting to loosen their grip and allow customers to play games physically, it is obvious that the casino industry still has a lot of room to develop, as shown by the sector’s massive growth in just the last year. This is the case even though land-based casinos are beginning to allow customers to play games physically.
As long as you do not spend all of your money on casino games, it is safe to say that investing in the online gambling sector is one of the wisest things you can do this year. When placing financial wagers, it is essential to pick reputable and established online casinos to place those bets at.