Sports betting stocks are definitely stocks to consider, if diversification is important to you. The sports betting industry is often overlooked by investors, despite offering great investment opportunities. The industry consists of great consumer discretionary stocks with strong outlooks, also making them value plays in their own right.
Due to these factors, sports betting stocks may fill a hole in an investor’s portfolio. In this list, we’ve assembled three of the best. Each has unique reasons for it could be worthwhile scooping up shares or at least adding them to your watchlist.
Here are the best sports betting stocks to buy for September.
NeoGames (NASDAQ:NGMS) is an iLottery and gaming services provider to lotteries and gaming operators. There are a few reasons you should consider NGMS stock. For one, the company announced it is being acquired by Aristocrat Leisure Limited (OTCMKTS:ARLUF) for $1.2 billion. By some accounts, there’s a consideration that its stock price doesn’t accurately reflect this acquisition, implying the market will adjust its share price upwards to account for it.
The deal received unanimous support from NeoGames’ board of directors. Upon completion of the transaction, the company will become a subsidiary of Aristocrat Leisure, and NGMS stock will cease to be publicly traded. The companies aim to complete the move within the next 12 months, pending approval from NGMS stock shareholders and the fulfillment of certain closing conditions.
With shares trading on an undervalued level on a forward basis, there could still be some potential upside for investors to capitalize, making it one of those sports betting stocks to buy.
Melco Resorts and Entertainment (MLCO)
Melco Resorts and Entertainment (NASDAQ:MLCO) develops, owns and operates integrated entertainment and resort facilities in Asia and Europe. One thing that stands out about MLCO is the stock is currently priced at $9.31, below its intrinsic value of $20, according to some analyst estimates.
There’s also more making MLCO a strong pick. In Q2 2023, the brand reported a significant recovery, with total operating revenues of $947.9 million, a 220% increase from the same period in 2022. That performance was primarily due to the easing of COVID-19 restrictions in Macau. The company saw an operating income of $64.3 million, compared to a loss of $209.2 million in Q2 2022, and the Adjusted Property EBITDA was $267.3 million.
Therefore, the fact that its technicals are suggested to be mispriced along with a recovering fundamental basis, makes it one of those sports betting stocks to buy or at least place on your watchlist.
DraftKings (NASDAQ:DKNG) is a digital sports entertainment and gaming company with partnerships with major sports leagues and availability across multiple jurisdictions. The main reason I’m bullish on DKNG is because it raised 2023 revenue guidance, indicating strong business performance and growth potential. Management is typically very reserved in raising guidance in these cases, a strong signal they believe the company to be undervalued.
There’s also more. Despite a recent pullback in its stock price, it has surged 162% this year, and JPMorgan (NYSE:JPM) sees a buying opportunity, upgrading the sports-betting stock to Overweight. Analyst Joseph Greff highlighted the company’s appealing sector, attractive growth prospects and improving expense control as reasons for the upgrade.
So, by many investors’ accounts, DKNG remains undervalued, making it one of those sports betting stocks to keep an eye on, if not buy.
On the date of publication, Matthew Farley did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.