Alta Fox Capital, an investment management firm, published its second-quarter 2022 investor letter – a copy of which can be downloaded here. In Q2 2022, the Alta Fox Opportunities Fund (“the Fund”) produced a gross return of -8.46% and a net return of -8.66%. The Fund’s average net exposure during the quarter was 73%. Since its inception in April 2018, the Fund has produced a gross return of 505.72% and a net return of 330.36% compared to the S&P 500’s return of 54.52% and the Russell 2000’s return of 17.91%. Go over the fund’s top 5 positions to have a glimpse of its finest picks for 2022.
In its Q2 2022 investor letter, Alta Fox Opportunities Fund mentioned NeoGames S.A. (NASDAQ:NGMS) and explained its insights for the company. Founded in 2014, NeoGames S.A. (NASDAQ:NGMS) is an Israel-based software company with a $395.3 million market capitalization. NeoGames S.A. (NASDAQ:NGMS) delivered a -44.96% return since the beginning of the year, while its 12-month returns are down by -68.31%. The stock closed at $15.29 per share on July 29, 2022.
Here is what Alta Fox Opportunities Fund has to say about NeoGames S.A. (NASDAQ:NGMS) in its Q2 2022 investor letter:
“NeoGames SA (NASDAQ:NGMS): Since Q1 of this year, several improvements to the fundamental thesis have emerged. Over the last twelve months, NGMS had a significant headwind as their largest market, Michigan, showed monthly revenue declines after more competitors entered the iCasino market. However, our channel checks suggest that Michigan’s iLottery sales have returned to a position of growth in Q2 and we believe this headwind now provides easy comparisons for the next year. NeoGames also recently announced its first full-service iLottery & sports betting contract win in
Brazil and will be supporting the Loteria Mineira, the official state lottery of Minas Gerais, Brazil’s second largest state with a population of ~21M.2 Our preliminary estimates suggest this contract could represent more than 75% of the value of the Michigan contract at maturity which we estimate would translate into a >15% uplift to 2021’s pro forma EBITDA number. While it will take time for this contract to reach maturity, the win increases NGMS’ strategic value as the dominant and best-inclass iLottery provider globally. The ability to buy a stake in the leading global digital lottery provider with 20% organic revenue growth, EBITDA leverage, and significant insider ownership at less than 7x our 2024 earnings per share estimate seems extremely attractive.”
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Our calculations show that NeoGames S.A. (NASDAQ:NGMS) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. NeoGames S.A. (NASDAQ:NGMS) was in 16 hedge fund portfolios at the end of the second quarter of 2022, compared to 16 funds in the previous quarter. NeoGames S.A. (NASDAQ:NGMS) delivered a 16.99% return in the past 3 months.
In October 2021, we published an article that includes NeoGames S.A. (NASDAQ:NGMS) in the 11 Best High Dividend Stocks Under $50. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q2 page.
Disclosure: None. This article is originally published at Insider Monkey.
