Sometimes, it pays to get a little perspective.
At Fantini Research, we’ve just launched four new stock market indices focused on gaming companies.
The motivation for the launch was the dramatic changes that have occurred in the structure of the gaming industry in the recent past. We’ve seen mergers, of course, and the birth of gaming real estate investment trusts. We’ve seen private companies go public and new competitors arise. That’s become fairly normal in an ever-changing world.
Change has accelerated more dramatically in the past two years, in large part because of the proliferation of sports betting and the rise of online gaming in the United States. This has led to many new names in the space and put globalization on warp speed.
We’ve thoroughly discussed these phenomena, these names and their investment implications in this space as events have unfolded.
Now, we thought, is the time to develop indices that reflect this new industry structure for investors and observers to track and to compare.
The result is four new indices. They start with the Global Top 30, a sort of Dow 30, though a weighted index as opposed to an average, of the 30 largest gaming companies in the world by market value. The other indices are North America, Interactive and Sports Betting. Each is designed to be a cross-section of that sector or region.
In assembling these indices, the points above about changing the landscape and globalization became evident. Consider the Global Top 30 includes names Kindred, Evolution Gaming and OPAP, which were not familiar to those outside Europe or the world of internet gaming just a short time ago.
Another first impression came in looking at the changes in the indices from their base dates.
Fantini’s Gaming Report Editor Blake Weishaar designed the indices and backdated them to January 2, 2018, to give them some history and perspective.
On the eve of their September 23 launch, the Sports Betting Index stood at 175.97 from its January 2018 base of 100. That is clear evidence of investor enthusiasm for the prospects of sports betting in the US.
The Interactive Index showed the same bullishness for online at 141.44. The Global Top 30 was a solid 111.52.
Perhaps the most interesting result was the North American Index, which is comprised of all US companies except Great Canadian Gaming and Pollard Banknote. This index stood at 100.72, meaning that even the devastation of leisure and hospitality stocks this year did not entirely wipe away the gains made prior to the COVID pandemic.
For comparison purposes, the old North American Index, which dated from January 2, 2012, was 204.93, the old World Index was 162.91 and the old Interactive Index was 380.88.
One can expect the changes that prompted this reorganization of indices will continue because, as in the world at large, gaming exists in an environment of rapid change.
The indices along with a graph that tracks performance historically can be viewed at https://www.fantiniresearch.com/indices-home-page.html.
