[Stock Update] Sega Sammy (OTCMKTS: SGAMY, TYO: 6460)

The owner of Sonic the Hedgehog has recently been added to the KonichiValue stock portfolio. In this post, I'll outline the compelling reasons behind my decision to invest.

Please note: This article is for informational purposes only and is not intended as investment advice. The mention of specific stocks is not a recommendation to buy or sell any securities.

Sega Sammy has recently been added to the KonichiValue stock portfolio. In this post, I'll outline the compelling reasons behind my decision to invest.

Summary

• Sega Sammy's valuation reflects its Pachinko (Japanese legal gambling) roots, but this ignores the significant value of its gaming IPs.

Less than one third of Sega Sammy’s profits comes from Pachinko

• With a P/E Ratio of 7.8x, it's trading closer to full Pachinko companies like Sankyo and Universal Entertainment, despite owning blockbuster gaming franchises.

• Sega Sammy’s gaming division includes top-tier IPs such as Total War, Football Manager, Sonic, Yakuza, and Persona, plus the recent Rovio acquisition with Angry Birds.

  

• The company's shift towards gaming and entertainment is not yet fully recognized in its stock price, presenting a unique opportunity for investors.

  • A few days ago, Sega Sammy showed their new restructuring strategy for 2024 that will focus more on their gaming IPs at the cost of their Pachinko arm.

For my full stock analysis on Sega Sammy from August 10, 2023, click here:

[Stock Analysis] Sega Sammy (6460, SGAMY): Is the Fallen Gaming Titan Due for a Comeback?

Market Misjudgment