in Mobile Gaming

G5 Entertainment successful at bestappever awards 2011

The vote is out and the winners of the Best App Ever Awards 2011 have been announced. More than one million votes were cast and as we previously reported our top-pick G5 Entertainment had managed to get eight of their games nominated for the final 10 in their respective categories (http://nordicinvestor.net/2012/01/04/several-g5-games-in-the-run-for-bestappever-2011/). While none of them made it to the absolute top, four G5 games finished among the top three. This is great advertising and a further proof of the quality and popularity of G5 games. We are looking forward to the long list of new games that G5 aims to launch during 2012 and most certainly, some of them will be among the top games this year as well.

G5 Entertainment winner games 2011:

Best Free to play game Android: Virtual City Playground, second place http://bestappever.com/awards/2011/winner/fpgm

Best Adventure game iOS: Kaptain Brawe, second place http://bestappever.com/awards/2011/winner/adgm

Best Casual game Android: Crystal Port, third place http://bestappever.com/awards/2011/winner/cagm

Best Game series Android: Stand O┬┤Food 3, third place http://bestappever.com/awards/2011/winner/fcgm

Meanwhile, the stock market slowly but steadily seems to come to its senses and is gradually revaluating the G5 Entertainment share. The G5 share is up more than 40% year-to-date, as the company continues to deliver on its targets. Nevertheless, as we have commented on before, the current valuation is still well below the level’s seen one year ago and far, far below the levels that would be justified by the company’s performance. At yesterday’s closing price of SEK 31, the G5 share trades at a PE-ratio of 9.7x expected 2012 earnings. Exactly one year ago, the share traded at around 14-15x expected 2011 earnings. So despite the pleasant run so far in 2012, the G5 shares is still dirt cheap in our opinion and has much more give in the short-run (levels around SEK 45 per share seem realistic).

Moreover, we are convinced that mid- to long-term, we will see valuations levels that do justice to G5’s stellar operations. However, in order for this to happen, we think management will have to realize that “Aktietorget” is not a suitable marketplace for a high-class company such as G5 Entertainment. Simply by changing the listing to Nasdaq OMX, shareholder value could be increased significantly. Yes, it might cost more money to be listed there which will burden earnings somewhat but the multiple expansion that comes with such a re-listing will certainly elevate the share price. Furthermore, the current discount valuation makes G5 Entertainment very vulnerable for a hostile takeover. The success of the company certainly does not go unnoticed among its bigger competitors.

I am long G5 Entertainment and you should be too!

Nordic Investor

Related Posts

2 Comments

  1. TopCow January 28, 2012 Reply
  2. Nordic Investor January 28, 2012 Reply

What is your opinion? Let us know