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      Five Best SPAC stocks To Invest - Stocks Telegraph

      By Ali Hassan

      Published on

      April 19, 2022

      11:46 AM UTC

      Five Best SPAC stocks To Invest - Stocks Telegraph

      SPAC is one of the simplest ways to take an existing private company public. SPAC, or a special purpose acquisition company, is another name for a blank check company. It means an entity with no commercial operations that complete an IPO. Last year, SPAC stocks were not in a good shape with many deals de-SPACed. SPACs can be complicated at times so it’s really important to know the private company they’ll merge with a blank check company.

      The speculative exuberance phase for SPACs looks to have ended. But that doesn’t discount the reality that many are still active in their search for target companies. SPACs continue to flood the market and demand for targets remains high.

      Even though both deal activity and performance for SPACs have fallen considerably but interest among investors remains high. 2022 may be the right time to dive into SPAC stocks. Some exciting SPAC deals along with existing SPAC stocks can be a great investment option.

      We have compiled the five best SPAC stocks to buy in early 2022.

      26 Capital Acquisition Corp. (ADERU)

      Founded by Jason Adler, a financier with an extensive background in gaming, 26 Capital (ADERU) was created to buy casinos and similar properties. It’s doing just that with its deal to acquire Philippine casino resort Okada Manila from its current owner, Japan-based Universal Entertainment Corp.

      The transaction will result in Universal owning around an 88% stake in the combined company. The deal values the gaming property at $2.6 billion.

      26 Capital has $275 million in cash raised from the sale of ADERU stock. The SPAC will use the capital to finance further growth opportunities. That includes a possible expansion into the recently-opened Japanese market.

      The country is only opening up three casino licenses. Competing with well-established bidders like Caesars Entertainment and MGM Resorts, it may be tough for Okada Manila to grab a piece of the action.

      That said, shares could still see long-term appreciation even if its expansion efforts fail to pan out. Per projections from its investor presentation, EBITDA for its Manila property could rise to $516.3 million by 2025, thanks to the pandemic recovery and other factors.

      Given the higher EBITDA multiples for similar Asian gaming plays, ADERU SPAC stocks could see a big appreciation on multiple expansion alone as it makes its way to this target.

      Guggenheim (GGPI)

      Gores Guggenheim (GGPI) was founded in 2020 and the company has a merger deal with Sweden-based EV upstart Polestar. Polestar is backed by Volvo and its corporate parent Geely. The EV maker has already started full-scale activity and plans to operate in 30 countries by 2023. The target is to sell 290,000 vehicles per year by 2025.

      Last year was a standout for Polestar. The Swedish EV maker delivered 29,000 vehicles globally, satisfying its sales target. Compared to the previous year, sales rose by an impressive 185% year-over-year. Furthermore, the company “more than doubled” its retail footprint in 2021, now operating 100 retail locations globally.

      In 2022, Polestar plans to expand its presence in European and Middle Eastern markets like Portugal, Ireland, Israel, and Kuwait.

      EV stocks have waned in popularity recently as the overall vehicle electrification trend continues. With Polestar achieving its targets and growing with certainty, GGPI stock falling in the category of one of the best SPAC stocks could be a great buy now.

      USHG Acquisition (HUGS)

      USHG Acquisition (HUGS) is a SPAC chaired by Shake Shack, co-founder Danny Meyer. Differing a bit from most of the aforementioned deals, it’s taking a more-established business public. In a complex deal, Panera Brands will go public, then merge with HUGS.

      The nature of this SPAC merger is unconventional and the deal’s financials have yet to be released. Therefore, it’s tough to assess whether it’s worth buying HUGS stock at its current price of around $10 per share.

      On one hand, depending on Panera’s initial public offering price, investors in this stock may get a position in this soon-to-be public company at a favorable valuation.

      On the other hand, if Panera prices its IPO too aggressively, shares in the target could drop after their debut. That would make buying HUGS stock today a losing proposition for investors. Much like DWAC and FTCV stock, consider this SPAC play one for the wait and see the basket.

      If more details emerge about its deal or it dips back below its offering price, this may become a buy. For now, keep it on your watchlist in SPAC stocks and stay on the sidelines.

      Sports Entertainment Acquisition (SEAH)

      Sports Entertainment Acquisition (SEAH) is a SPAC that works in the sports and entertainment sectors. Since the start of the omicron- and Fed-fueled selloff in November, iGaming, and sports betting stocks have been a losing bet. That’s the case for shares in Sports Entertainment Acquisition, which is taking Betway parent Super Group public.

      It’s a matter of time before the shareholders of SEAH stock will approve the business combination. Following the new combination, SEAH stock will trade with a new ticker SGHC.

      In November 2021, increased awareness caused SEAH stock to spike to as much as $12.48 per share. Investors who got in near the top may be currently underwater on their wagers. But in time, it could prove to be a winner in SPAC stocks.

      Therefore, SEAH stock looks to be in a good buy position.

      UWM Holdings Corporation (UWMC)

      United Wholesale Mortgage Holdings (UWMC) made its public debut almost one year ago in 2021. The SPAC company merged with Gores Holdings to become UWMC. The company provides residential mortgage lending in the US through a wholesale channel.

      UWMC stock has been dealing with increased bearishness since the company unveiled a secondary stock offering in Nov 2021. UWM Holdings announced a secondary offering to increase its low public float of nearly 97 million shares. That’s an increase of 50% to generate more liquidity. However, the market reacted poorly, and shares tanked. Speculation and elevated short interest could set UWMC stock for a short squeeze in the foreseeable future.

      UWM is highly profitable and is trading in a huge upside position. There has been increasing optimism among analysts lately about the company’s earnings prospects. The indications are solid by strong agreement among analysts in revising EPS estimates higher. That could be a legitimate reason to expect an upside in the stock. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

      UWMC is at a buy position as the SPAC stocks has an average price target of $8.16.