1 Strong Gaming Stock for Growth Investors | Smart Change: Personal Finance

Sea Limited (NYSE:SE) has a hot game right now in its games division. In this clip from “3 Minute Stocks Updates” on Motley Fool Live, recorded on January 5, Motley Fool contributor Brian Feroldi, explains why the real reason to invest in the company may well be its e-commerce platform.

Brian Feroldi: Sea Limited, stock symbol SE. The company’s most recent quarter was a beauty if you look at revenue. It’s a frontline story right now, so you should be. Third quarter revenue increased 122% to $2.7 billion. wow. Triple digit growth at this size and scale is nothing short of amazing. Free fire which is their battle royale game, remains the top-grossing game in Southeast Asia, Latin America and India, with 729 million active users, an increase of 27%. Can we pause and just say it’s 10% of humanity playing? This is amazing considering I don’t know anyone who plays this game. Greener’s digital revenue has increased by 93%. This is the games division. I think it’s logical to assume this is going to be a lumpy affair. It’s a game company, right? Free fire is a hot game right now. Will it be long term? I do not know. The best reason to invest in Sea Limited is because of Shopee, which is its e-commerce platform. Their sales increased 134% to $67 billion. Its third growth engine is Sea Money, which is growing from a very small base, but revenue there has grown 818% as Shopee continues to grow. Now, the company recently struck a new deal with a company called Puregold in the Philippines, which allows Sea Money to be accepted at 400 grocery stores, continuing to go offline. They have also expanded their partnership with MasterCard (NYSE:MA) in Thailand. The total volume of payments on this platform has increased by 111% and there are now 40 million Sea Money users. Today, company-wide gross profit has more than doubled to a massive $1 billion. But still, this company is very much in growth mode. The net loss actually widened to $448 million in the quarter. However, this company has $11.8 billion in cash on its balance sheet, which allows it to fund losses for many more years if it chooses. The big thing to watch with this company is just the top line and there it is. In fact, management raised its full-year revenue forecast to $5.2 billion. That’s a growth rate of 135%. If you are a growth investor, Sea Limited is worth a look.

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