Sports Stocks, and Why I Love 'em

Published on: Jun 21, 2017 4:11:19 PM

The sports season is just about over! For major competitions, that is. 

We are now entering the off-season, where we are left with nothing much but post- and pre-season chatter to keep us entertained in the meantime.   
Seeing as the pre-season is when sporting brands go crazy with advertising sporting goods, I think that the off-season is the perfect time to take a look at some of our favourite sporting brands (and even teams).  
With EasyEquities set to offer US stocks on the online platform, it would be an opportune (and very fun) idea to exploit the off-season. 
Nike (NKE), one of the most globally recognised brands, seems a decent long-term investment choice. However their competitors aren't performing badly either, as Adidas (ADDYY) has been tipped by analysts as a hot buy due to the return of retro streetwear and fashion. In my mind this rivalry between the two brands takes on another dimension as it spills into the markets, following closely behind the show-down of our era between Messi and Cristiano (sponsored by Adidas and Nike respectively). Under Armour (UAA), on the other hand has seen a hectic dip in recent years, although for you growth investors it may seem an appetising venture. 
 
Given the upcoming venture into US stocks at EasyEquties, we are spoilt for choice as there are other non-apparel stocks you can look at in the sports industry.
 
While I am not a fan of referees for the most part; mega retailer Footlocker (FL), along with their black and white stripped logo-mascot-whatever, is another listed company that excites me. Not only because they seem to offer every major sports brand under the sun, their stock seems a pretty long-term investment going on stock price alone. 
 
Unfortunately, one stock that is guaranteed to make many South Africans salivate is the Man United (MANU) share. Having debuted on the NYSE on 10 August 2012, MANU has seen some dramaticspikes and downturns in the share price. 
My view is that the stock, much like their team at the time of publishing, aren't all that exceptional. Underwhelming both on the field and in the markets, MANU has seen better days. While historically they have had a good run of glory, as a team and a stock that have dipped dramatically, ocassionally rebounding. Still, one cannot deny the support the team has garnered both locally and internationally. If shirt sales are anything to go by, then United pull ahead of the world's most prestigious teams. A trend that doesn't seem to be bucking anytime soon.
 
Now you may fight me on why I have categorised this next stock as a slightly sports tangent stock, but my inner six-year old will not listen to reason. Plus the keyword here is 'tangent.' Despite all pretences on the arena, the WWE stock (WWE) is by no means a pretender in the long run. 
While the stock is volatile in the shorter time range, the stock price has more than doubled (nearly tripled) over a five-year timespan. 
These returns would more than make up for PG13 storylines that have since taken over in that interim five to ten years, as well as the campy spandex clad, oiled bodies thrown around the stage. 
 
There's also a lot of debate on sports being a recession-proof industry. There's plenty of research to comb-over on both sides of the fence regarding this. While sponsors may pullout or cut-down on retail marketing; on the other hand, die-hard fans stand up to economic woes and fluctuations. In the rare occurrence that fans do not flock to whatever stadium is nearby, we may still hold onto television subscriptions. The need for escapism in times of hardship isn't exclusive to comic book superheroes, but for athletic heroes and heroines as well. In this current domestic economic climate, I personally could do with some kind of escape.

So take your pick. The sports season may be up, but the markets never are.
Showcase your loyalty to the athletes and performers that you so vehemently defend in your local bar and from the comfort of your couch. 
They might just pay you back handsomely.  
 
 
 

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@StandwaNongauza

Any opinions, news, research, reports, analyses, prices, or other information contained within this research is provided by an employee of EasyEquities an authorised FSP (FSP no 22588) as general market commentary and does not constitute investment advice for the purposes of the Financial Advisory and Intermediary Services Act, 2002. First World Trader (Pty) Ltd t/a EasyEquities (“EasyEquities”) does not warrant the correctness, accuracy, timeliness, reliability or completeness of any information (i) contained within this research and (ii) received from third party data providers. You must rely solely upon your own judgment in all aspects of your investment and/or trading decisions and all investments and/or trades are made at your own risk. EasyEquities (including any of their employees) will not accept any liability for any direct or indirect loss or damage, including without limitation, any loss of profit, which may arise directly or indirectly from use of or reliance on the market commentary. The content contained within is subject to change at any time without notice.

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