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2 Tech Stocks to Buy on Dips

2 Tech Stocks to Buy on Dips

Posted On February 26, 2021 12:59 am
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It’s been an exciting start to the year for investors, with several tech stocks up more than 20% year-to-date and the Nasdaq Composite (COMPQ) up over 5% to start the year. This relentless rally has added to an already impressive 44% return for the market last year, with 2021 on track to nearly match last year’s performance if this momentum continues.

The only negative development that’s come from relentless bid under the market is that sentiment remains in nosebleed territory, with investors buying calls relative at the most pronounced pace in nearly a decade. Therefore, further upside could be a little more dependent on strong stock selection vs. the uniform bid we’ve seen across nearly all stocks the past year. One theme that’s done very well this year is the Online Gambling space, so we’ll look at two stocks in this industry group below:

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(Source: TC2000.com)

One of the key themes that has produced a lot of winners this year is Online Gambling, given that states are continuing to legalize online sports betting since the election. There is still significant white space in the United States in terms of states yet to legalize online sports betting, and two names that have done quite well in the group are Draftkings (DKNG) and GAN Limited (GAN). The first company has a $23BB market cap and is the leader in online sports betting, while the second provides the tech casinos need to bring their business online and sports a $1BB market cap. Let’s take a closer look at both companies below:

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(Source: Company Presentation)

Beginning with GAN Limited, the company is a leading developer and supplier of online gaming content and enterprise-level business-to-business gaming software systems. The company deals with casinos and provides the software that they need to handle things like account registration, regulated limits management, regulatory reporting, as well as GAN’s proprietary content. GAN has already scored major deals with companies like Wynn Resorts (WYNN) and Churchill Downs (CHDN). So far, the company’s revenue growth is incredible, with a two-quarter average revenue growth rate of 93%. The biggest recent development is the company’s announcement that they’ve acquired Coolbet, an international sportsbook that complements its stack. The biggest benefits of this deal are…

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