The last year has proven to be a challenging time to pick a winning investment inside the S&P/ASX 200 Index (ASX: XJO). A quick look at the Aussie benchmark shows that the majority of constituents' share prices are worse off than where they were a year ago.
However, one portfolio manager is putting her expertise to work in an attempt to uncover a winner. In a recent interview, Jun Bei Liu of Tribeca Investment Partners paints a picture of an ASX-listed investment with plenty of potential.
Let's take a look at what ASX 200 share it is before jumping out of the gates.
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Punters season underway
At times it can be difficult to forecast the peaks and troughs of cyclical businesses. Other times, it can be quite simple.
For instance, retailers tend to see their highest sales in the weeks around Christmas and Boxing Day, airlines tend to land their busiest season during summer, and sports betting companies typically make bank in spring.
Last weekend, we witnessed the AFL grand final between the Geelong Cats and the Sydney Swans. This weekend, we will see the NRL grand final between the Penrith Panthers and the Parramatta Eels. Soon after, the ICC men's Twenty20 World Cup will be held. And, Australia's biggest horse racing event — the Melbourne Cup — is set to take place on 1 November.
As you can imagine, the next couple of months is a punter's paradise. Hence, Liu is expecting the gloves to come off, and the Tabcorp Holdings Limited (ASX: TAH) share price to start swinging… to the upside.
The seasoned portfolio manager shared her take on this ASX 200 share with The Age, saying:
We're heading into a seasonally strong period for Australian wagering and a lot of these companies are going into spring with extremely defensive positions.
I can easily see it go up by 10 to 20% because Tabcorp is the only one going through seasonally strong periods and still trading very low multiples and yet analysts don't upgrade.
The Tabcorp share price has retained its value far better than other ASX-listed wagering companies in 2022. While the ASX 200 constituent is down 6.5%, others such as Pointsbet Holdings Ltd (ASX: PBH) and Betmakers Technology Group Ltd (ASX: BET) have sunk 70% and 62%, respectively.
Valuation on ASX 200 gambling giant
Checking out the fundamentals of Tabcorp reveals the company is loss-making for the latest trailing 12-month period. This means we should probably look at the price-to-sales (P/S) ratio for a rough comparison, rather than earnings.
Right now, this ASX 200 share is presenting with a P/S ratio of around 0.9 times. Meanwhile, the industry average is situated at two times sales. Ironically, that is exactly what Pointbet is currently valued at, with Bluebet Holdings Ltd (ASX: BBT) close behind at 1.8 times.
