Thread by @RTRowe

I promised a thread on a stock that I researched and then been buying heavily ever since. It's been weeks since I made the promise, looking to fulfill it tonight…
(Beg you some patience if it's a slow thread, my brain tired at this point in the day)

Ok, so some background, I don't look wildly at the whole market, it's always a targeted look with the goal as the guide. I started this one at the start of the year while looking for this year's (I hate to say it…😔)…dark horse.

The guiding goal for me was to find something that would be able to take good (imo) volumes, and be a business that's growing, in an industry that's growing (or preferably multiple), while the business itself grabs and builds on opportunities everywhere it touches…

The GRWR Grads know how seriously I take goals & how I expect them to be laid out. Since this thread isn't in my private Twitter circle however, I'll hold off from naming my specific goal details, percentages, timings etc. Suffice it to say it was in the high double digit gain…

Ok, so now that the general lines of my goal have been laid out, I'll jump to the end and tell you the stock, then (for those of us wise enough to understand that the "why" is more important than the "what" ) I'll tell why I picked that stock and continue to buy it…

So what was the stock? It was this one 👇🏾
$SVL.ja
mymoneyja.com/s/svl/20220719…

Now for the "Why?". $SVL.ja has been a bit of a quiet giant on the market since it listed a little over 16 years ago in 2006. It spent a long (LONG) time at the single-digit share price level till late 2017 when things got…exciting…
icinsider.com/is-war-about-t…

The new guys came in, mentioning at to the press in late 2017, that they see at least an extra $1 billion in profit from the direction they intend to take SVL in… The share price increased around then. 2018 started off with the share price over $11 & ended that year over $16

The new guys seemed to have some positive effect on the share price, at least for the Retail Shareholders at the time… The company itself, was now firmly starting out on the track this new leadership had decided on… So enough story time, fast forward to where we are now…

Fast forward to early 2022 and we now have an $SVL that's established itself firmly across the lottery and gaming sectors. Now remember at the start I mentioned that my ideal company would be a growing business? SVL qualifies fully, & possibly not in the ways you may imagine…

Everyone knows that the most powerful local broadcast is the Cash Pot Draw. Multiple times a day, and played right across the island, Cash Pot is woven into the fabric of Jamaica. "Weh di man play?" could be our second national anthem… it's affordable ($10) and everywhere…

I mention Cash Pot because it's the most popular Lottery Game, & Lottery is the core of what $SVL does. In 2021 SVL brought in $93 BILLION in ticket sales, that's $17 BILLION (or +22% ) more than it did during COVID's 2020. ~$10BILLION of the increase was from Lottery.
#Growth 🗹

Since we're on growth, the next area that stands out for them, is Sports Betting. That contributed an additional $6.1 BILLION to the revenues vs. 2020. The increase there was over 50%! So the 2 biggest areas of growth, are showing strong potential…

But that's not all, growth is good, but so is stability. Which brought me to a point that a lot of us may know but may never have really thought of it fully…
You know how you can get phone credit from the Cash Pot Machine? Well then that means that $ must be going to them right?

Well in '21 $SVL brought in $43.9 BILLION in revenue, & $11.6B of that came from selling PIN Codes. I knew you could buy credit at the machine but I didn't realize that much had been flowing through them! Turns out it's not new, in 2020 PIN code rev was also $11.6B
#Stability 🗹

Next on the list is me looking for outsize opportunities, which I'm defining as; areas in which the company has an advantage & the potential to turn that advantage into heavy profit. Think of something like $BPOW.ja spinning off their Lumber Dept into its own listed co $LUMBER.ja

Within that definition $SVL may have a few "outsize opportunities" starting with their core, Lottery. Remember how the all-powerful Cash Pot Draw can *urge* even the Bro-est of Gads to cut their broadcasts short? $SVL went ahead & exported that. In 2020 they launched in S. Africa

Sports Betting is another outsize opportunity, SVL says there's increasing demand from younger consumers & JustBet Mobile is leading this. I don't gamble but I do support a football team that doesn't support me…& the idea of at least earning $ off the pain is an attractive one…

PIN Codes were flat coming out of 2021, but $SVL.ja isn't being comfortable with the stability. They launched a product called Charge Up last July which increased their product access and since 2022 has shown growth with the segment's profitability increasing by 82% so far…

Smart move, they've launched an improvement which is bringing in better profits, increased their network, and IMO hinted at broadening their footprint even more with what I think is a mobile money hint with the "almost any rechargeable product" line…🤔

So with all that said, lemme cut this short by getting to 2 of the factors that to me sealed in the outsize (& outside) opportunity.
1. Caymanas Park
GoJ actually owns Caymanas, SVL won the contract to run its Operations in 2017, since then they've been quietly improving it…

Check this as a very recent example.
This pic is showing Management was describing Caymanas at the end of 2021. Notice the progress of the plans being implemented along with them noting the "profit potential"…aka soon, but not yet.

This pic, shows Management speaking about Caymanas at the end of March of this year…
Seems they've started to realize the profit potential…
Subtle, but prescient?

Now to add a cherry on top of the "outsize" opportunity… SVL manages Caymanas via their subsidiary SVREL (Supreme Ventures Racing & Entertainment Limited). Thats where the actual horseracing happens…& betting…& events…
This company IMO could stand on its own…🤔

I mean, I'd buy it if it was ever spun off and listed on its own. It would need to have profitable efficient operations however and a tight handle on it's heaviest costs, things like water for the animals & facilities, cheaper electricity sources etc…
Get me?

Guess which horseracing park just got a new well dug, and are putting in a solar energy system? One guess…
Exactly… Imagine how much profit a business can make if it can cut NWC and JPS out of their business equation?
This was in April 2022 btw…👇🏾👇🏾jamaicaobserver.com/business/cayma…

Let me be clear, I don't know that this arm of the business would ever be spun off on its own. That sort of thing requires not just inventive leadership but also a willing & imaginative broker to partner with the company.
Pic 1 is $SVL.ja's Chairman
Pic 2 is Mayberry's CEO.

So #1 was Caymanas…
#2 Lottery, the core of the company, almost half of all the money $SVL.ja brings in is from Lottery products (48% of Rev.) The right innovation in this segment has outsize profit effects.
They found it with a new lottery product…Instant Scratchaz.

The 'secret' weapon of Scratchaz' effectiveness?
One $SVL.jm VP explained it simply and clearly here.
That immediacy of result is the perfect fit our current short-attention-span dopamine-dependent culture.
Scratchaz is TikTok's Cash Pot.

How big was the initial impact?
Between Jan and March of this year they helped bring in over half a billion more in profit. If you look deeper you'll notice a roughly $1.4B increase in Revenue there also…a good chunk of that is Scratchaz.🤯

Here's the clincher, Scratchaz launched in the 2nd week of March 2022. $SVL's First Quarter ended March 31st 2022. So the Scratchaz increase is that was reported was less than 1 month of being in the market.

The quarter after that one would be the first quarter to show a full 3 months of Scratchaz being sold.
If a few weeks had that level of impact, what are 3 full months likely to look like?

That quarter ended on June 30th, 2022. It's due to be reported in 3 weeks (and 4 days). But these guys have been reporting early for a little while now. The reports tend to drop within 3 or so weeks of the quarter's ending. I wouldn't be surprised if it dropped soon.

I'm legit excited to see what the results look like, and of course, some gravy; they pay dividends quarterly. Divs which keeps the more heavier pocketed investors interested since the cash flow from them paying out so much of their profits constantly is attractive to some.

If you'd bought it at the price it started 2022 at ($17.79) then your Div. Yield is 2.9%…after taxes. One of the largest, for those who go in for dividends (I don't, but the market takes all types).
For comparison, the avg annual return on a savings account currently is ~0.41%