Symmetry Invest, an investment management firm, published its fourth-quarter 2020 Investor Letter – a copy of which can be downloaded here. A return of 40.4% was recorded by the fund for the year end 2020, outperforming its MSCI ACWI benchmark that delivered a 12.3% return. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.
Symmetry Invest, in their Q4 2020 Investor Letter, said that GAN Limited (NASDAQ: GAN) was a company they followed for a long time and was able to buy shares of the company in its focal point. GAN Limited is an online gaming platform that currently has a $1 billion market cap. For the past 3 months, GAN delivered a 65.11% return and settled at $29.09 per share at the closing of February 18th.
Here is what Symmetry Invest has to say about GAN Limited in their Q4 2020 investor letter:
“We have been following GAN for a long time while it was a small AIM-listed stock. The company had gained a strong market position in New Jersey when the state opened up the market for online casinos in 2014, and also exhibited solid growth and a compelling market position in Italy. But at the same time, it was loss-making, had to constantly raise new capital and the growth was not “overwhelming”. We still spent time familiarizing ourselves with the company, as we could see that their market position in the US could become a strength in due time. The first crucial news came in mid-2018 when the PASPA rule was removed, and all states in the US were free to self-regulate sports betting and casino. This presented itself a clear opportunity for GAN, but as they still did not have a sports betting product, we bided our time. When Pennsylvania, in 2019, also allowed sports betting and casino, and we saw how Fanduel/Betfair started to gain a strong market position building on GAN’s platform, we initiated a purchase. At the time the stock was still only increasing slightly, and the financials were still not good (it takes time for leading KPIs to affect the numbers). We continued to buy in light of willingness from more states to open up, and GAN signing on more and more customers. In May 2020, GAN chose to substitute the small AIM exchange for Nasdaq in the US. As reported revenue began to rise +100% YoY and margins followed, the stock reacted strongly. The stock thus ended up rising 1.000% from mid-2018 to mid-2020. Even during 2019, one could still buy the stock for 3-8 USD (the stock was listed in the UK and in pence at the time). Today it is traded for approximately 20 USD.
GAN is therefore a great example of how you can follow a company for a long time, do your analysis, and be ready to buy in when the business model is facing the crucial inflection point.”
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