Sports betting stocks appear comparatively resistant to the volatility in the global macroenvironment this year, according to Roth Capital Partners. Stocks saw yet another brutal sell-off Monday as investors gain confidence in the prospect of easing global trade tensions, and as President Donald Trump’s latest attacks on Federal Reserve Chair Jerome Powell raised questions about the independence of the central bank’s monetary policy from political pressure. “In our view, market signs point to a prolonged period of repair,” JC O’Hara, chief technical strategist at Roth, wrote in a Sunday note to clients. “Trend damage requires difficult work to repair. Levels of old support, which now act as resistance for plenty of equity charts, will be a challenge to overcome, especially with the lack of assistance from the Federal Reserve. It is still too early to say the worst is behind us.” Despite the gloom, O’Hara highlighted one emerging investment theme that is working, at least on a relative basis: sports betting companies. The gaming industry has often been considered resilient to periods of economic slowdown. “The theme of sports betting has slowly been outperforming the S & P 500,” O’Hara said, pointing to the Roundhill Sports Betting & iGaming (BETZ) ETF as “an easy way to play upside for this theme.” The BETZ exchange-traded fund has added almost 2% in April, while the S & P 500 has plunged about 9%. The ETF’s largest holdings include FanDuel parent Flutter Entertainment , Genius Sports , Italian gaming company Lottomatica Group, Swedish casino and gambling company Betsson and U.S. gambling platform DraftKings . BETZ 1Y mountain Roundhill Sports Betting & iGaming ETF over the past year. O’Hara noted that Betsson is a strong outperformer. Betsson broke out on a relative basis to where it has traded since the middle of 2016, meaning the stock has traded beyond its typical range and is performing better than the rest of the market. The ADRs are higher by 24% over the past three months alone, and yield about 1%, according to FactSet data. The technical analyst, who specializes in studying price charts, also highlighted shares of VICI Properties , a gaming real estate investment trust, saying it is “on the verge of breaking out with much relative improvement already taking place.” Based on price patterns, O’Hara said Vici could reach $36 a share. The stock is up almost 15% this year and yields a bit more than 5.3%. Some popular sports gambling stocks have suffered alongside the broader market this year, with DraftKings sliding 22.4% over the past three months and Flutter Entertainment by 18.3%. But at least one other firm on Wall Street agreed with O’Hara on Monday, when Deutsche Bank initiated research coverage of Genius Sports with a buy rating and $12 price target, saying the business sports data company was well positioned to prosper despite a bumpy macroeconomic environment. Get Your Ticket to Pro LIVE Join us at the New York Stock Exchange! Uncertain markets? Gain an edge with CNBC Pro LIVE , an exclusive, inaugural event at the historic New York Stock Exchange. In today’s dynamic financial landscape, access to expert insights is paramount. As a CNBC Pro subscriber, we invite you to join us for our first exclusive, in-person CNBC Pro LIVE event at the iconic NYSE on Thursday, June 12. Join interactive Pro clinics led by our Pros Carter Worth, Dan Niles and Dan Ives, with a special edition of Pro Talks with Tom Lee. You’ll also get the opportunity to network with CNBC experts, talent and other Pro subscribers during an exciting cocktail hour on the legendary trading floor. Tickets are limited!
