What do you base that on?

They might be wrong, but most of the smart people think DFS is a winner-take-all situation

here's a good article on the topic

http://www.breakingvc.com/2015/07/15...eady-been-won/

I read a book "The Incredible Shrinking Alpha" which is basically arguing that it is almost impossible to generate excess return beyond that which is explained by factor models (e.g. Fama French). One of the cause, they say, is the rapidly increasing level of competition (there's less dumb money than there used to be, more information is available, investors are better educated, etc.). And of course they use the poor (and decreasing) excess returns of mutual funds as evidence.

I was tempted to learn more about securities analysis, but this book makes me uncertain. Perhaps I should just invest based on simple factors.

Can you argue for the other case (i.e. it's not that hard to generate excess return)?

I don't buy that dfs is winner take all and I think that the market opportunity is insanely high. I also think Amaya would be in a position to grab a sizable portion of normal sports betting in the U.S. when it becomes legal. I use when because it seems inevitable that it will become legal in the next 10 years, but likely much sooner than the long end there.

Price target?

Long AYA

888 makes 29% of revenue from poker, 58% from Casino, 13% from Bingo/Other.
Bwin.party makes 18% of revenue from poker, 38% from sports betting, 35% from casino and 9% from bingo.

They are virtually a lock to be the market leader in sports/casino it will do more than backfill their poker revenue.

According to H2GC the global interactive gambling market expected to grow from 33.2billion in 2014 to 51.8billion in 2018 and Amaya is positioned as a monopoly in this market.

I like how you skipped over my other post where I point out the stupidity of their currency excuse. Instead you compare a poker site to a gambing site. Why not compare it to Ladbrooks and assume they can eventualy get all their revenue from gambling?

$10 but I would probably cover my short at $20. 35% of the way to my target!

Hey value guys, wanted to talk a bit about Twitter. Was reading this article, which I guess both longs and shorts could enjoy:

http://lowercasecapital.com/2015/06/...tter-can-be-2/

It's from June of this year, so still recent enough. It was written by this guy, whom I think has some pretty good qualifications in the industry.

Now admittedly he's got a lot of reason'$ for wanting twitter to do well, he doesn't hide how invested his fund is in it. It's a great (but long article), and I'll coles a few things from it here for people not willing to read it all:

What Is Going Well At Twitter?

The pace of product development has accelerated dramatically.
Twitter has shown a willingness to take more risk in making changes to the core product.
Revenue is growing at 74% year over year. (There is no public company of that scale growing anywhere near as fast.)
The management team has stopped selling their stock.
The Google deal is a big win.
Periscope and TellApart are strong acquisitions. (Periscope may prove to be the most important deal Twitter has ever done.)

What’s Not Going Well At Twitter?

New user growth has stalled.
Almost one billion users have tried Twitter and not stuck around.
Direct response advertising has fallen short of hopes.
Wall Street’s confidence in the management team has diminished.
Twitter has been unable to convince investors of its potential upside.

He then proceeds to outline a number of their pain points, and how he feels they have a chance at turning them around. I'd briefly tried to tackle these 2 years ago and realized twitter would probably have to pivot into them soon anyway (ease of use, channels, locations, way better use to participate live etc...).

All this to say that at some point with the right pivots, I've got to think twitter is a great opportunity for the buy hold crowd. Anyone care to chime in?

You are missing the scope of pokerstars dominance in the online gambling market. They are more than just a poker site. Like quoted before, they could already the market leader in non poker gambling just by having the option on their sites in some markets and with no marketing.

They have the most powerful brand in gambling. The most deposits, liquidity, best software and support, and enormous amounts of lifelong customer loyalty even in the US market where nobody will forget how they saved their FTP balances.

You don't short dominant monopolies with unlimited growth runways.

Quote:
Originally Posted by ahnuld
draftkings, which is one of the biggest, got valued recently at 900mm....


Latest valuation I saw was $1.5 Billion, and I think it will go higher soon enough

What confidence can you have that management will execute well? Heck, we don't even know for sure who management will be.

This is the opposite of value investing.

latest valuation I see is 1.2 billion but thats not a true valuation because a lot of the money invested by fox is required to be spent on ads on fox channels. So latest clean valuation is 900mm. theres also no reason to believe the valuation should ove higher or lower, since we dont have any financials.

Hello guys ,, have a serious question..

i usually specialize in shorts,, (90%+ of my plays are on the short side) , but now has come a time where i need to find some long term longs where I can see great results.. def looking for growth .. def looking for something that can become the new bellwether in an industry that is just starting to take hold .. i have had a good knack in finding 10-20 baggers before , (SAM (before the whole craft beer thing took place) and pcln (same storyline) . i think the key to finding these possible high % returns would be

1. market cap under 1 billion or so (500 mill would be ideal )
2. fully reporting (meaning not a bulletin board stock)
3. minimal analyst coverage (2-4 tops)
4. NEAR 52 week highs , even in down markets,, these stocks will keep uptrending

The IPO market of the past 10 years and their inflated valuation from ipo date makes these plays harder to find .. but it is still possible

So my question to this thread is ,, what are some of your favorite stocks that fit these parameters?? .. I will be doing research this week and will also update on what i find..

you keep ignoring my post where you repeated the same amaya crap about poker growing and I debunked those myths. Id like a response to that post.

also no where in any of your posts do you put a valuation on anything. should it just trade at a bajillion times free cash flow due to qualitative factors? and I am shorting them and doing quite well so far.

Thanks for the currency explanation. I still don't buy the argument the poker economy is shrinking. Granted this is from their investor presentation but the source is H2GC and they are projecting significant growth
https://gyazo.com/10480f5384a6d6493de11ab7fcbfab5e

Your only valuation was a 15.5 EBITDA multiple that is now 12.8 and there are several avenues for the earnings to grow I don't understand how casino/sports is already built into the EBITDA.

Congrats your short has done well albeit how much do results mean at this point?

The poker market is shrinking whether you buy it or not. Check pokerscout reports for ring game traffic. down big year over year for almost every major site.

Pokerstars itself has declining poker volumes overset by price increases as evidenced by their weak Q1 and Q2 earnings reports.

I never claimed DFS was factored into the ebitda, I only said in a 10 billion cap structure, when the market leader is worth objectively 900m then it cant be a massive swing factor.

the current enterprise valuation is 8 billion and I think true ebitda will be closer to 550mm than the consensus 615mm. a large part of that difference is adjustements which amaya always has and always uses to obfuscate their declining revenues and operating income. on that they are trading 14.5x in a declining business. thats a crazy high valuation.

You say I only gave out 1 ebitda number. you havent demonstrated any math, or facts, whatsoever. All im using are actual results (read: facts).

And no its too early to say the investment has been positive. Im glad for that because id rather have the opportunity to put on a nice put position for next spring when they report and lap Q4 (first time people will see results arent growing) and report Q1.

How do you get 8 billion enterprise valuation,
http://finance.yahoo.com/q/ks?s=AYA+Key+Statistics
4.56 billion on here

Ring game traffic declining does not mean poker traffic declining DUCY?

I've given out math and facts about its competitors and the industry. You're the one who uses faulty logic and nonsensical arguments (LOL pokerscout... sure ring game is decreasing but tournaments/sngs are more than offsetting that decrease) to conclude that the poker market is shrinking and that casino/sports isnt going to improve earnings.

so you admit to being unable to calculate enterprise value even remotely correctly and not having provided any numbers actually ascribable to amaya....

ok thats it for me, no more tapping the glass

im trying to understand why my thesis is incorrect and you resort to arrogance and personal attacks, not what this community should be about.

whats wrong with the yahoo calculated enterprise value, do you mind sharing how you got to your figure?

Ahnuld is using CAD, Yahoo USD.

Yahoo isn't using the fully diluted share count. ~200m

I read the financials

CAD?