TSG

The Stars Group Inc

TMT


Presented:12/19/2018
Price:$15.55
Cap:$4.23B
Current Price:$27.31
Cap:$7.86B

Presented

Date12/19/2018
Price$15.55
Market Cap$4.23B
Ent Value$11.78B
P/E RatioN/A
Book Value$15.42
Div Yield0%
Shares O/S271.98M
Ave Daily Vol1,957,876
Short IntN/A

Current

Price$27.31
Market Cap$7.86B
The Stars Group, Inc. provides technology-based products and services in the global gaming and interactive entertainment industries. It owns gaming and related consumer businesses and brands, including PokerStars, PokerStars Casino, BetStars, Full Tilt, StarsDraft, and the PokerStars Championship and PokerStars Festival live poker tour brands. The company operates through the Business-to-Consumer segment. The B2C segment is divided into the Poker, and Casino and Sportsbook business lines. It offers non-poker gaming products, including casino, sportsbook and daily fantasy sports. The Stars Group was founded on January 30, 2004 and is headquartered in Toronto, Canada.

Publicly traded companies mentioned herein: Sky PLC (SKY LN), Stars Group Inc (TSG; TSGI CN), William Hill PLC (WMH LN)

Highlights

With shares of Canada-based Stars Group (TSG; TSGI CN) trading at ~$16 (C$21 locally), the presenter sees an opportunity to own a misunderstood online gaming company with a compelling growth story at a cheap multiple (7.5x expected 2018 earnings). Formerly known as Amaya, and with controversial ex-CEO David Baazov out of the picture, having stepped down in the wake of insider trading charges (2016), the “new” TSG is a more diversified online gaming business following the acquisitions of Sky Betting & Gaming (SBG; $4.7B, April 2018) and CrownBet (BetEasy, Feb 2018, $118MM); and in the presenter’s opinion it is well positioned to benefit from a cross-selling opportunity globally that is not being baked into expectations. It is also one of the best ways to play the growth of online sports betting across the US in coming years. If his assessment of the setup, and outlook, for TSG is accurate, the company could double or triple EBITDA over the next three years, which would drive the stock meaningfully higher.

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Idea Discussion

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