Alta Fox Capital, an investment management firm, published its first-quarter 2022 investor letter – a copy of which can be downloaded here. In Q1 2022, the Alta Fox Opportunities Fund (“the Fund”) produced a gross return of -11.71% and a net return of -11.91%. The Fund’s average net exposure during the quarter was 82%. Since its inception in April 2018, the Fund has produced a gross return of 561.70% and a net return of 371.16% compared to the S&P 500’s return of 84.18% and the Russell 2000’s return of 42.39%. Try to spend some time taking a look at the fund’s top 5 holdings to be informed about their best picks for 2022.
In its Q1 2022 investor letter, Alta Fox Capital 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 B2G and B2B technology and service provider with a $378.7 million market capitalization. NeoGames S.A. (NASDAQ:NGMS) delivered a -46.72% return since the beginning of the year, while its 12-month returns are down by -70.22%. The stock closed at $14.80 per share on May 03, 2022.
Here is what Alta Fox Capital has to say about NeoGames S.A. (NASDAQ:NGMS) in its Q1 2022 investor letter:
“NeoGames S.A. (“NASDAQ:NGMS”): NGMS has declined over 70% from all-time highs. The stock now trades at 9x 2023 P/E and 6.7x 2024 P/E for a business that should organically grow revenue at ~20% per year and operating profits even faster.
NeoGames is the leading iLottery player in North America. iLottery is an attractive industry because it represents only ~5% of the total U.S. lottery spend today while it represents closer to 50% in other developed countries. Over the next decade, more states will likely legalize iLottery, revenue per capita will grow for existing states, and NeoGames revenue and profits should multiply significantly. Finally, the iLottery market is a healthy oligopoly. Only three companies have ever won a significant U.S. state lottery contract due to the risk-averse incentives of state government officials awarding contracts and the highly technical and regulated format in which lotteries operate.
The stock ran to over $70/share in June of 2021 as investors became excited about the company’s long-term growth prospects and the potential for a meaningful new state contract win (Ohio). At the peak share price in June 2021, the stock was trading at over 100x forward P/E and north of 40x EV/EBITDA…” (Click here to see the full text)
Cylonphoto/Shutterstock.com
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 fourth quarter of 2021, compared to 22 funds in the previous quarter. NeoGames S.A. (NASDAQ:NGMS) delivered a -39.24% return in the past 3 months.
In October 2021, we published an article that includes NeoGames S.A. (NASDAQ:NGMS) in 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 Q1 page.
Disclosure: None. This article is originally published at Insider Monkey.
