We may finally have some light at the end of this COVID tunnel. Even so, with stocks as ridiculously high they are it’s impossible to know what happens now. The S&P 500 started off strong yesterday, but finished below its pre-vaccine announcement news. The bubbly Nasdaq actually lost 2% as stay-at-home COVID stocks tanked. Everybody is totally confused. Finding a good investment as opposed to a speculation on prevailing Wall Street mood swings is still a daunting task.
In the meantime, real business conditions continue to deteriorate in Europe as the lockdowns have returned. Today we’ll go through one of the newer European players, Aspire Global, one of the few bona fide investments left in the European gaming sector. It’s not riskless, and there are considerable dangers attached to it. But it does have all the characteristics of an ambitious, sprightly, yet conservatively managed company with new and exciting products that just needs a bit to go its way in order for it to reach a new and higher tier. A successful COVID vaccine would certainly help in that direction.
In many ways, Aspire looks a lot like 888, both in its fiscal management and business style. The two companies are already working together actually, through Aspire’s Pariplay casino gaming subsidiary. Aspire is small and nimble, with products that stand out, a 75% focus on B2B over B2C and small, early acquisitions that complement its pipeline and ambitions. Also like 888, Aspire has no net debt, and from what I can see, it is not in the business of humongous moves that grab headlines but put its long term future in doubt. It only joined public markets in 2017, and since then its stock has been more or less stable and the company consistently profitable. The stock tanked during the March panic like everything else, but really not by much relative to its peers.
Where Aspire currently is in its development as well as its inherent business model do help mute the effect of lockdowns so you can’t really see them in its top and bottom lines. Total revenues for the first 9 months of 2020 were 18% higher than for 2019. Net income was down 20%, which is to be expected for a company looking for growth opportunities. The key is, it’s been clearly profitable throughout this tumultuous and crazy year, and that gives Aspire some breathing room to get through the challenges of 2021, which in my view could be quite extreme. Many companies won’t survive 2021 in my opinion, at least not in their present forms. But Aspire has a good shot at making it through if it remains careful. If it does make it through, the opportunities on the other side will be huge.