The Digital Economy Heavily Favors a Position in Sea

It’s a shame that some traders completely ignore international stocks. Investors should give Sea (NYSE:SE) serious consideration as the company could soon become a household name even in North America. If that happens, the SE stock price would undoubtedly appreciate quickly and sharply.

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To fully understand the value that Sea offers, you need to view the company’s business model as a three-pronged foray into the Asian digital economy. That might sound complicated, but it’s quite simple when it’s broken down into Sea’s individual segments.

When you get to know Sea as a company, it’s not hard to envision a bright future as e-commerce and digital entertainment aren’t going away anytime soon. There’s no need to be intimidated by international stocks as long as you’re investing in solid companies. And Sea is about as solid as they come.

A Closer Look at SE Stock

If you examine the price action of most stocks, the negative impact of the novel coronavirus can easily be detected. Since Sea is headquartered in Singapore, we can see that the impact occurred sooner than it might have if the company had been based in the United States.

Sea is heavily immersed in the comparative unscathed e-commerce market. Thus, the dent in the SE stock price resulting from the coronavirus was quick and relatively painless. Moreover, the rebound from the low point has been relentless.

The fact that SE shares shot up from $38 to over $100 in a matter of months, might be a cause for concern among value-focused investors. Therefore, we will need to demonstrate that Sea has what it takes to provide continuing shareholder value.

Diving Deep into Sea

Sea is involved in three areas of the digital economy and they’re all very lucrative and mostly pandemic-proofed. By breaking them down, we can get a closer look at at business that’s not only survived but grown during these challenging times.

Probably the best place to start is Shopee, which is Sea’s e-commerce platform. Shopee has a major presence in Southeast Asia and Taiwan. Its objective is to provide a seamless experience for both shoppers and sellers.

Emphasis is place on interactivity with Shopee. Indeed, the platform “allows buyers to chat with sellers, which helps to build trust.”

And if you’ve ever had a substandard customer-service experience when shopping online, you’ll surely understand how important the bond of trust can be.

Winning the Digital-Commerce Game

You gamers out there should appreciate the next part of Sea’s business model. It’s known as Garena, and it’s an e-gaming platform that’s tailored for local markets.

Even many non-gamers have heard of the very popular League of Legends, and that game is in Garena’s stable of offerings. Another of Garena’s games is called Free Fire. In 2020’s first quarter, this was the highest-grossing mobile game in Southeast Asia and Latin America.

Furthermore, Garena organizes e-sports events in Taiwan and Southeast Asia. This is a savvy business move as it can serve to consolidate the user base and encourage brand loyalty.

On top of all that, Sea also owns a digital financial services network called SeaMoney. Users in Southeast Asia will recognize this arm of Sea’s business under the brand names AirPay, ShopeePay, and Shopee PayLater.

The concept behind SeaMoney’s various brands is to provide users with a full suite of financial and transactional services. These include payment processing, e-wallet services, and even micro-lending. With a large user base, SeaMoney remains a value-added component of the overall Sea ecosystem.

The Bottom Line

By taking a position in SE stock, you’re basically getting three lucrative companies in one. Sea’s share price isn’t at its low point, but the company’s international presence is likely to expand quickly. And that should boost the stock price as the digital economy’s growth should continue to favor Sea and its investors.

As of this writing, David Moadel did not hold a position in any of the aforementioned securities.

Article printed from InvestorPlace Media,

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