There are many beaten-down small-cap stocks right now, but if I was going to pick one for the biggest potential percentage move over the next three to six months, it would be Elys Game Technology (ELYS) .
I've discussed ELYS many times in the past, but it has not been able to build good price momentum, despite performing very well fundamentally. Management has been impressive and had done a very good job hitting its goals, and that should pay off eventually.
The ELYS story is that it operates a successful Italy-based sports gambling operation and is now starting to market its infrastructure in the U.S. It is taking its success in business-to-consumer gambling in Italy and leveraging that platform on a business-to-business basis in the U.S.
The company recently unveiled its sports betting platform at the National Indian Gaming Association Trade Show in Las Vegas.
In addition, on July 7, ELYS acquired U.S. Bookmaking for $12 million in stock and cash with various milestones. The CEO commented, "Our team at Elys has worked diligently to prepare our leading-edge platform for the booming opportunity in the U.S. market. Our focus has been to ensure that our future U.S. clients are able to access a design-built solution for sports betting in the U.S. that is locally supported with comprehensive trading, risk management, operations, and maintenance teams for frictionless deployments."
On July 26, Maxim initiated the stock with a buy and a target of $10. The analyst stated that he "expects continued growth in Europe and Italy, where Elys is an established and well-respected technology brand and sportsbook operator, while its recent acquisition of U.S. Bookmaking immediately bolsters its U.S. strategic roadmap and should unlock synergies.
The stock trades at a little more than 2-times trailing revenues and is on the brink of rapid expansion. The chart is poor due mainly to weakness in the small-cap sector, but with the football season fast approach, this innovative sports betting microcap should see increased interest.