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The Top Sports Trade to Make for the Win

Last week inside Top 5, we presented a leading onsite and online gambling and entertainment company in Penn National Gaming (PENN). That stock has largely defied the challenges of last week’s otherwise terrible stock market to come out positively with our target price set at $81.76.

We discussed how the market for gaming and betting specifically is really on a roll and that Penn National should continue to capitalize on its onsite and online capabilities – furthered with recent co-ops and expansions.

Penn National Gaming Five-Day Price — Source: Dow Jones

And this week, we are doubling-up on our betting stocks with another betting and entertainment company focused on one of the hottest sectors of sports.

This company is right in the middle of a great book of business and may well be successful at one or more deals to expand its footprint online both in the US and well beyond.

Online Betting Getting Bigger

Online sports betting is a huge market that’s scoring big for the leading companies in this market. Gone are the days of tracking down local bookies or having to travel to visit physical sports book venues. Betting on favorite teams and players is just a click away.

The success of online sports betting and gaming shows up in how well the business is doing and in turn driving more bets on the leading stocks in this industry. And as we showed you last week, this market continues to be a big winning bet for traders.

indeX Online Betting Index Price Performance — Source: indeX & Bloomberg

A leading newer index of online better enterprises from indeX shows how online betting – especially from sports wagers – is soaring in business. The index has gained 304.70% from March 2020 to now.

This week, we move deeper into the online betting market with our focus on sports betting with our new trade that we’ll present in a moment.

This continues our successes in our stock trades inside Top 5 with the average return on our hit stock trades at 7.41% for a total gain for hit trades running at 436.95%. And for the stock option alternatives presented for many of the stocks, the average gain for hit trades is running at 42.86%.

So, for weekly hit stock trades and stock option alternatives, these returns add up and can compound to amount to four-figure returns over the year.

The Sports Trade to Make

DraftKings (DKNG) is a leading online sports betting and entertainment company based in Boston that continues to book wins in customers and for its shareholders.

Sales growth has been a big score for the company with gains running strongly from last year by 90.02%, if only from a lower base of business.

And this has continued to accelerate through the latest quarter of this year by a whopping 319.57%. The company continues to win regulatory concessions in more US states as well as international venues that empowers further sales gains in the making.

It is currently in a series of discussions over co-ops and deals to expand its operations both in its core business as well as other betting and entertainment markets.

The stock is also a big bet with major fund managers and actively managed ETFs – bringing more active buying of the stock.

The company continues to be in growth mode, but continued heavy development expenses and investments in its capabilities as well as in marketing is resulting in continued near-term losses.

DraftKings Price & Technical Analysis — Source: Traders Agency & TradingView

But the bet continues to be that this is one of the best sports betting companies in the business and for us in the stock market right now.

The Trade to Make for DraftKings

The trade to make for DraftKings is to buy the shares as they cross our identified counter trend line and then hold it for the target price of $52.63. 

From the current price of around $50.44, it represents a potential cash gain on the shares of 4.34% for a short-term trade.

This is a great opportunity for a quick gain right now, as DraftKings is a top stock to buy right now in Top 5.

Keep on trading,

Josh Martinez

Editor, Josh’s Top 5

P.S. This is a great pick, but it’s still only one out of my Top 5. To find out about the rest of the trades I’m recommending, complete with specific entry and exit points, you need to click here and join me on the Top 5 journey…