Three Top Picks from Haywood Capital

Investment bankers Haywood Capital Markets released its 2023 Best Ideas report on Wednesday, saying there are enough macro factors at play to make for a potentially difficult market to navigate. From central banks and uncertainty on how they’ll play interest rates in 2023 to inflation’s unknown path and the potential for a prolonged recession, investors will want to monitor the health of the underlying economy carefully, Haywood said. 

“In the near term, we would not be surprised to have heightened volatility in equities as investors digest different data points to better gauge the direction central banks will take,” Haywood said.

With that in mind, Haywood’s top picks to outperform in the Special Situations/Technology bracket include the following three names, listed in alphabetical order. All projected 12-month returns are as of the January 11 publication date of Haywood’s report.

Stock: Bragg Gaming (Bragg Gaming Stock Quote, Charts, News, Analysts, Financials TSX:BRAG)

Haywood Rating: Buy

Haywood Target Price: $14.00

Projected Return: 150 per cent

B2B gaming tech company Bragg Gaming gets the nod from Haywood analyst Gianluca Tucci, who said the stock is “severely undervalued” for a company showing robust growth and in an enlarging market, and one without the need for capital to fund its operations, either.

“We view 2023 as a year focused on North American growth and expanding proprietary content reach which the company started rolling out in 2022,” Tucci wrote.

Stock: East Side Games Group (East Side Games Stock Quote, Charts, News, Analysts, Financials TSX:EAGR)

Haywood Rating: Buy

Haywood Target Price: $3.50

Projected Return: 317 per cent

Mobile game developer East Side Games is a top pick for analyst Neal Gilmer, who said the company continues to demonstrated solid year-over-year revenue growth and is looking like an attractive acquisition target at current trading multiples. Solid gross margins above 60 per cent should also continue into the new year, Gilmer said, as the company puts its focus on its IP-driven roster of games.

“We believe East Side Games has created a strong free-to-play mobile game develpment platform that remains poised for growth,” Gilmer said.

Stock: Green Thumb Industries (Green Thumb Industries Stock Quote, Charts, News, Analysts, Financials CSE:GTII)

Haywood Rating: Buy

Haywood Target Price: $23.00

Projected Return: 111 per cent

In the cannabis space, Gilmer likes US multi-state operator Green Thumb, saying the company has good positioning in markets that still have significant growth potential, while Green Thumb has a track record of leading its peers in cash flow generation. Look for GTII to become free cash flow positive, Gilmer said.

“Green Thumb has existing operations in several states that are in the process of getting their adult-use programs up and running, such as New Jersey, Connecticut and Maryland, as well as several others with the potential to pass adult-use reform in the near to medium term,” Gilmer wrote.