The Canadian eSports stocks we’ve chosen stand to benefit most from the emerging eSports industry in 2020
SmallCapPower | January 9, 2020: Esports is undergoing a transformation. Video games such as Fortnite, League of Legends, and Overwatch have taken the world by storm. Viewership at tournaments is bigger than ever, even surpassing traditional sports, and capital is flowing into the industry from sources that would have never considered it before. In 2015, 800K people worldwide were aware of eSports, with that number expected to almost double to 1.5M people by the end of 2019, and there is still tremendous growth forthcoming. In addition, the audience of eSports streams and broadcasts, which showcase tournaments, leagues, and other events, has also been on the rise, with the global eSports audience estimated to grow to 453.8M viewers by the end of 2019 (Newzoo). Today we have found four Canadian eSports stocks that we believe have the most upside potential in 2020.
eSports Stocks: Next Big Opportunity for Investors
*Share price data as at January 7, 2019, data obtained from S&P Capital IQ
New Wave Esports Corp. (CSE:NWES) – $0.09
eSports
New Wave Esports is an esports and competitive-gaming focused investment company based in Toronto and L.A. The Company offers capital and advisory services (acting as an operator in portfolio companies) to the esports industry, primarily to teams, organizations, events, tournament organizers, platforms, networks, technologies, and tools. New Wave Esports announced recently that it had closed its investment in Talon Esports, a professional esports organization. Talon has won multiple championships across various gaming titles, including Overwatch, Street Fighter V, and Tekken 7. In addition, Talon has secured sponsorships with partners such as Logitech, H Cubed Investments, Noble Chairs and Twitch and is expected to be a solid addition to New Wave’s portfolio. Additionally, New Wave announced its plans to acquire Event Matchup Gaming, a Toronto-based leading esports and competitive gaming event organizer, and player management company that produces onsite and online tournaments. Event Matchup Gaming hosts 80+ events a year, focused mainly on events within the fighting community including Super Smash Bros., Street Fighter V, Tekken 7, Dragon Ball Fighter Z, and more. Since the beginning of the year, NWES stock has rallied +70%, and is our highest conviction idea in the esports space.
- Market Cap: $6.7M
- YTD-Return: +70.0%
- 14-Day Return: +88.9%
- 30-Day Average Trading Volume: 375,580
Enthusiast Gaming Holdings Inc. (TSXV:EGLX) – $1.89
eSports
Enthusiast Gaming owns and operates an online network of websites devoted to video gaming as well as Canada’s largest video-gaming expo. EGLX’s content platform consists of over 80 gaming websites with more than 75M visitors every month, which has driven more than 12B ad requests per month. Behind Twitch Interactive, EGN Entertainment, and GameSpot, Enthusiast’s content is one of most viewed North American gaming sites. Enthusiast also owns and operates Canada’s largest gaming expo, Enthusiast Gaming Live Expo, with approximately 55,000 people attending in 2018. On December 18, 2019, EGLX announced that it had received approval to up-list to the TSX.
- Market Cap: $135.5M
- YTD-Return: -10.6%
- 14-Day Return: -11.1%
- 30-Day Average Trading Volume: 205,650
ePlay Digital Inc. (CSE:EPY) – $0.05
eSports
ePlay Digital engages in developing and operating broadcast and live-video technologies. As a mobile game creator specializing in sports and augmented reality (AR) entertainment, the Company offers white-label videos and marketing platforms. Management recently issued revenue guidance, stating that it is expecting US$42 million in revenue by 2021, generated primarily through consumer product sales and software licensing fees. At the 2019 Consumer Electronics Show (CES), the Company announced that it will add a new AR version to Big Shot AR, the first augmented reality sports mobile game. On January 8, 2019, ePlay announced that Big Shot has been downloaded over 35,000 times and revenue from the game increased by 580% in 2019.
- Market Cap: $3.0M
- YTD-Return: +25.0%
- 14-Day Return: +11.1%
- 30-Day Average Trading Volume: 101,420
Axion Ventures Inc. (TSXV:AXV) – $0.31
eSports
Axion Ventures is an investment company with a majority ownership in Axion Games, an online video game development and publishing company headquartered in Shanghai, China. The Company also has majority ownership in True Axion Interactive Ltd., its video game development company in Bangkok, Thailand. Axion Ventures (AXV) also has several other portfolio companies in related innovative technologies. On July 22, the Company announced that it has closed a non-brokered private placement of convertible debentures in the principle amount of US$1.375M; the debentures convert at C$0.90 per common share and have an interest rate of 10%. On October 17, 2019, Axion announced the initiation of the prototype for its mobile version of the popular PC game, Rising Fire.
- Market Cap: $65.8M
- YTD-Return: +0.0%
- 14-Day Return: -6.1%
- 30-Day Average Trading Volume: 14,800
Ubika Research/SmallCapPower has received compensation from New Wave Esports Corp. to provide analyst research coverage. For full disclosure please visit here >>
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