8 reasons to buy Team1731 Mar 2020 16:01
Wakefield-based Team17 is my favourite investment at the moment and I believe that - despite it more than doubling in the last year and being more than 50% up since January - the best is yet to come. Here are 8 reasons why:
1. Great leadership: CEO Debbie Bestwick has 30 years of experience in the games business and is still very much involved in the day-to-day running of the company. Reading interviews with her, you can see that she’s still very down-to-earth, really values her staff and has learnt from the mistakes of focusing too much on new iterations of the hit game, Worms. Diversification has moved on and now 100 Team17 games are available.
2. Go-to Indie publisher: Team17 have a great in-house team to develop games but they have also cleverly positioned themselves as a brilliant publishing partner for indie developers. An example is the very successful Escapists game, coded by a British roofer! He was contacted directly by Bestwick and allowed to keep the IP while Team17 polished the game and converted it so that it could play on multiple platforms.
3. Online games: 80%+ of game sales are online via Steam so costs are kept low and dynamic pricing is intelligently used. Worms still brings in £5m a year!
4. 10 new games are due this year: shares are up over 50% this year despite the market hit and that was without the release of any major games. They are coming and will start being released from this month with Moving Out being a big release on April 28th. It’s a co-op game that has great accessibility features, ensuring the games can be played by all levels of ability.
5. Worms is coming back this year: This was a huge hit in the day and this first version of Worms for 4 years has generated a big buzz.
6. Gaming is huge: The gaming industry is now bigger than the music and film industry combined and Team17 are one of just a handful of UK-based game-only shares. It’s the Games BAFTAs on 2nd April so gaming will be in the spotlight this week.
7. EPS: They're relatively new to the stock market but the EPS went up 387% last year and earning estimates were raised 5 times. With all the releases weighted from this point on, the 2nd half of 2020 should be strong.
8. Cash-rich company: There’s no debt at Team17 and November the net cash position was £35.8m, allowing them to buy Yippee Entertainment for £1.4 million in January, gaining IP, increasing studio capacity and getting access to a new talent pool in the North West. The company is recruiting to build for the future.
DYOR and good luck
Ken
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