Better Collective - Leading sports betting media group

[kvatchero]

Let’s create our own thread for Danish Better Collective, as the Red Eye thread suggested there would be interest.

Better Collective’s seed was sown in 2002 when two friends decided to set up a website focused on sports betting. As the site gained popularity, the friends decided to found a company called Better Collective in 2004. Today, Better Collective looks like this:

So what does Better Collective do? The company is a leading media group focused on sports betting, whose mission is to connect bettors and operators. The company owns several thematic websites, such as Bettingexpert, Betcompare, and VegasInsider. The sites offer bettors added value in the form of education, community, betting tips, and bonus offers. The company’s primary earning model is based on forwarding customers to operators as shown in the picture:

The 2021E P/E is 30, which is relatively moderate, considering the company’s strong and profitable growth, which is not expected to slow down in the near future:

The company’s future prospects are, in my opinion, more than good, as it rides on several positive drivers, of which I would mention:

1. The shift of betting from physical gambling to online
2. Phones and improved internet connections. The possibility to play conveniently anytime, anywhere
3. New markets opening up due to regulation, especially the USA (picture below)
   
   

The market growth forecast is very promising:

The company’s ownership structure is strong, with the founders owning 45.5% of the company, and there are many institutional investors involved. The company is also in Red Eye’s Top Picks portfolio with a weighting of 9.5%. Red Eye’s fair value is 260 SEK, the current share price is 212 SEK.

Thoughts, concerns, worries, or wishes? The floor is open.

[T111]

The company recently made an acquisition, acquiring Action Network. Edit: In this context, a share issue was made, which lowered the share price from SEK 237 to SEK 210. In addition, the price had been only a few weeks earlier at SEK 268.

The number of new shares was about 15% and the issue price was SEK 218. The share price has fallen by about SEK 60 within a month, which seems like a strange overreaction. If one looks purely at the financing obtained from the issue and its impact, the impact on the share price should be in the order of a few percent.

[kvatchero]

The price before the issue was SEK 237.5, which dropped to SEK 209.5, with the issue price being exactly SEK 218. In my opinion, it was also an incomprehensible reaction and offered a very good buying opportunity. Red Eye’s analyst was also a bit surprised by this and decided to add it to their top picks soon after.

[Huhtis]

Target Prices

• RedEye fair value 145-350SEK, base case 260SEK
• Nordea 305SEK (Buy) 14.5.21
• ABG 320SEK (Buy) 14.5.21
• SEB 260SEK (Buy) 26.4.21

RedEye’s forecasts for the coming years (11.3.21)

[alona]

Q1 video

Better Collective Q1 2021 results

Redeye’s comments:

[T111]

@kvatchero

The price before the offering was SEK 237.5, which dropped to → SEK 209.5

True, the effect of the offering wasn’t quite as significant as I had written there, so I edited my previous message.

[Hades]

For those interested in investing in esports, Better Collective is also a rather interesting company, as it indeed owns HLTV.org, which is the esports portal for Counter-Strike: Global Offensive (I can’t think of a better term right now). The site contains all possible data from the scene, creates news, rankings, and video material, and connects game streamers with viewers. The site primarily generates revenue by advertising betting sites and their CS:GO betting markets. Many can probably draw parallels to the Eliteprospects website in the world of ice hockey, although there are naturally differences. This site can practically be considered an arena where you watch, comment, compete, and bet on CS:GO, and the brand of this arena is very strong.

I dug up information from the Danish business registry, and HLTV has grown at a nice pace in recent years. Unfortunately, the latest fiscal period in the reports is 18 months long (7/2019-12/2020), and therefore it may not compare perfectly to previous 12-month fiscal periods. However, during that 18-month period, net profit exceeded €4.3 million. Divided evenly over 12 months, this would amount to approximately €2.9 million, which is already a significant portion of the parent company’s operating profit of approximately €22 million in 2020. Compared to the previous 12-month fiscal period (7/2018-6/2019), the profit grew by only about 7 percent, but in the years preceding that, growth has been clearly stronger.

[kvatchero]

Good news, one after another

https://www.gambling.com/news/us/louisiana-house-overwhelmingly-approves-sports-betting-bill-2549700

[Trabelsi]

Moderate opening offers when registering on gaming sites through Action Network / Vegasinsider in America:
https://www.actionnetwork.com/online-sports-betting

Best Sportsbooks in the US April 2026

There must be a lot of traffic on those sites, so the affiliate chest will probably be jingling with a fair volume.
It looks even better when you consider that many states are still opening up gambling and many betting companies are eager to enter the opening markets.

[Huhtis]

https://www.actionnetwork.com/press/mlb-action-network-partnership?utm_source=Twitter&utm_medium=Social&utm_campaign=tan

Better Collective’s recent acquisition, Action Network, is partnering with MLB. They already have existing partnerships with NBA and PGA Tour, among others.

"Later this month, we’ll start providing content to MLB to help service fans and bettors already using MLB’s platforms.

The deal will feature three components — written content, live shows, and integration between Action’s talent and data and MLB’s existing content"

[alona]

Stockpicker: The European Football Championship can give an extra boost to Better Collective

Better Collective, active in iGaming and lead generation, is tough on an acquisition-focused growth. Stockpicker upgrades its recommendation on the company to BUY but leaves the target price at SEK 250-260. We are waiting for clear signs of successful acquisition integrations before the target price is also raised.

When we last looked at the company’s share in January, we lowered the recommendation to Neutral (Buy). Despite a long-term positive view of the share, we thought at the time that expectations had been raised a little too much and consequently believed that there was a certain risk of disappointment when the financial statements were to be presented in February.

Seen today with the results in hand, the assessment has proven to be both right and wrong. Correct because the price really dropped after the publication of the Q4 report and is still in the current situation, six months later, at levels that applied then. Wrong because it meanwhile made a real jerk upwards and reached SEK 289 at its highest (+ 40% from the last analysis). It was even a bit over SEK 250-260 that we thought could be justified in the slightly longer term given that the company continued to deliver somewhat in line with our expectations.

---

Since the share is traded at approximately the same price as it was last time it went at the same time as in our opinion there is no direct reason to review our long-term view of the company (rather the opposite given the acquisition of Action Network) we choose to raise the recommendation to Buy. Until we have seen clear signs of successful acquisition integration, however, we choose to leave the target price at SEK 250-260. If the effects of the merger are as positive in reality as “on paper”, clearly higher values ​​can be justified.

This is an abbreviated version of the analysis.

Full analysis can be read via the direct link: Aktieanalys - Better Collective – årets höjdpunkt äntligen här » Stockpicker.se and at http://www.stockpicker.se/

[kvatchero]

https://twitter.com/roundhill/status/1408112546733867008?s=20

Oh my godddd

[T111]

Better Collective had a strong day of gains today, and the support level of 190 also seems to be holding for now regarding the latest downtrend.

The company is in a promising situation; I’m hoping for this kind of development for the stock in the long run.

[Jotuf]

Nordea Markets has a buy recommendation and a target price of 300.

https://www.shareville.fi/osakkeet/better-collective-as/kommentit/better-collective-nordea-aterupptar-koprekommendation-s-94338390

[lazyway]

How risky do you consider the company’s business to be?

Do you see any risks for the company in the development of regulation in the short or longer term?

[kvatchero]

Let’s put Betsson’s positive update here too.

https://www.betssonab.com/en/press/betsson-ab-trading-update-second-quarter-2021-1931790

[Junkbondking]

Maybe it’s a bit far-fetched that the positive earnings report would affect Better…? Maybe if player numbers have increased and they found the site through Better?

I should take a closer look at Better Collective…

[kvatchero]

Doesn’t that positive earnings revision indicate that the industry is booming, which means more players and more money? Betco also earns revenue, depending on the contract, as a percentage of the operator’s profits from the players it refers.

[Junkbondking]

Yeah, but it would be nice to know if the positive earnings surprise (posari) is due to successful odds calculations in Copa America and the European Championship, or due to an increase in player numbers. If Better Collective benefits from both, then great!

[Jotuf]

Revenues is expected to amount to SEK 1,735-1,755 million. Betsson has delivered its strongest quarter ever in terms of EBIT, which is higher than current consensus, fueled by a strong sportsbook activity as a result of the Copa América and the Euro 2020 tournaments, high sportsbook margin and positive gross margin impact from favorable product mix.