Hot Penny Stocks To Watch If You’re Looking At Esports
What industry better suited for the pandemic than Esports and what asset class resembles this early potential than penny stocks? Over the last year or so, this industry has seen a major uptick in attention thanks in part to the pandemic. Think about it, you’ve got social distancing, fierce competition, and yes, even sports betting.
Jason Blake, a contributor to Venture Beat & CEO of Complexity Gaming, believes now is the time for Esports professionalization. In a piece earlier this year, Blake emphasized my point above. He explained that esports became “a solution” for many industries.
“The accelerated production and heightened attention on esports exposed some of the fundamental cracks in the foundation and many of its pain points. To address these, we need to prioritize professionalization, especially in regards to player care, competitive integrity, and growing diversity and inclusivity.”
This sentiment has echoed throughout the course of the last few months in particular as we’ve seen many penny stocks soar well-beyond the upper limits of the $5 threshold. You may remember companies like Elys Game Technology (NASDAQ: ELYS) and Esports Entertainment Group (NASDAQ: GMBL). Not that long ago, both were trading well-below $5 but excitement and progress helped spur a surge in sector stocks, ELYS and GMBL included.
Now the hunt is on for more esports penny stocks to watch. Earlier this week, we discussed one of them after the latest analyst upgrade. However, there are a few more that’ve also turned some heads this week.
Esports Penny Stocks To Watch
- Super League Gaming Inc. (NASDAQ: SLGG)
- Allied Esports Entertainment Inc. (NASDAQ: AESE)
- RealNetworks Inc. (NASDAQ: RNWK)
Super League Gaming Inc. (SLGG)
Shares of Super League Gaming have made a strong move over the last few months. Since December, SLGG stock has been on the move jumping from around $1.85 to highs this year of $4.99. Following a few weeks of consolidation thanks to the downtrend across most tech names, SLGG has reversed course. As we pointed out yesterday, analysts at Maxim Group started covering Super League this week.
The firm issued a Buy rating on SLGG stock along with giving it a $6 price target. While shares have moved higher on Tuesday, this target is still over 60% higher than the opening price.
Super League recently raised $12 million at a price of $4.10; currently a premium to the early morning price on Tuesday. The company said that it intends to use the net proceeds from the offering for working capital and general corporate purposes, including “sales and marketing activities and product development” among other things.
A recent partnership with Harena Data has been the focus lately. The deal is expected to provide a robust production model to create and distribute video gaming and esports entertainment.
Allied Esports Entertainment Inc. (AESE)
Another one of the esports penny stocks we’ve discussed frequently is Allied Esports Entertainment Inc. The company recently sold off one of its larger assets bringing in nearly $80 million. Specifically, Allied sold its WPT poker brand to focus on strategic alternatives. The company also renewed its flagship property in Vegas, HyperX Esports Arena Las Vegas, which has also been seen as a positive by traders.
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Allied tapped Lake Street Capital Markets to aid in this exploration of strategic options for its e-sports business, which could include a potential sale. It looks like to goal is for Allied to become an entertainment holding company.
While not many new updates have come from the company, AESE stock has moved in sympathy with broader sector trends. In particular, last week, shares spiked following Citron Research’s report that GameStop should pivot and purchase Esports Entertainment Group as a means to diversify its model. The report cited, “There is one way for GME to seamlessly both pivot from its secularly declining retail business and monetize its customer database, and that answer is to acquire Esports Entertainment Group.”
RealNetworks Inc. (RNWK)
One of the potentially unsung “heroes” of esports penny stocks has been RealNetworks. RNWK stock has been in a solid uptrend since the start of 2021. The only thing that hasn’t been a major factor is trading volume. Other than a breakout day last week, RNWK hasn’t traded more than 4.7 million shares. I know this would appear as a higher number, but considering its peers trade much more actively, RNWK is on the lighter side of the volume coin. Regardless, it hasn’t negated that it could be one of the esports stocks to watch.
The company provides digital media applications and services for a broad range of audiences. This includes its RealPlayer software, allowing users to download, manage, and edit digital video for streaming purposes. In particular, Real’s SAFR computer vision platform is used for live video along with its Kontxt, an NLP (Natural Language Processing) platform for text and multi-media analysis. The company also has GameHouse, a casual gaming platform.
While it isn’t the “in your face” esports competition-based company like others in the space, it does share many of the same hot points traders have sought out. Furthermore, the way it traded in sympathy with GMBL, AESE, SLGG, and other esports stocks last week, could suggest it has gotten wrapped into this niche. Furthermore, last week, CEO Rob Glaser filed a 13G showing a stake of 38.5% in the company.
Keep An Eye On Industry Trends
One of the things to remember when it comes to Esports and other emerging industries, speculation can play a big role. As we saw last week with Citron’s report, just a whisper of bullish opportunity for 1 company triggered momentum in many others. On the flip side, bad news can also become a factor. While that hasn’t been the case, if you are looking at things like esports stocks, keep things like the sector sentiment in mind.