Are these sports stocks winners or losers?
Ah, the metaphors that link the arena of athletic competition with the cash coliseum of Wall Street: winners and losers, champs and cellar dwellers, home runs and strikeouts. For whatever stench of cliche these may summon, they sure beat any visuals of quarterly earnings report calls or depreciated machinery assets. But on Wall Street, there’s a twist even an umpire can love: An outfit that owns losing teams can still in fact crank out winning stock. Here are eight prominent stocks from the sporting realm.
Up for the rebound.
If 2016 was murder on Cleveland Indians fans, it was even worse for Nike (ticker: NKE). It earned the dubious title of the worst performer on the Dow Jones industrial average, its stock dropping 14-plus percent. But like Air Jordans off the hardwood, NKE has bounced back 6 percent so far in 2017. “Nike is seeing double-digit growth in China, with 14 percent gains in the first half of its fiscal year,” says Clement Thibault, senior analyst at Investing.com. “It’s now bringing in more than $1 billion worth of revenue on a quarterly basis from China alone.”
Join the club.
Callaway Golf Co. (ELY) has hit quite a few birdies of late. From this time last year, the stock is up close to 25 percent, now trading at about $11.20. With a market that spans more than 70 countries, Callaway remains a “strong buy” among eight of 10 Wall Street analysts, with two rating it a “hold” and none cautious about the stock. Only one drawback, though: You wish your golf game were this strong.
A Knicks loss?
An iconic sports name, Madison Square Garden Co. (MSG) owns five pro teams, including the New York Knicks and Rangers. “The company’s shares sell for around $176 per share, and are near the 52-week high of $188,” says Bob Johnson, president and CEO of the American College of Financial Services in Bryn Mawr, Pennsylvania. But are there weeds in this Garden? “The firm is currently losing money, with a trailing 12-month earnings per share number of negative $4.22,” Johnson says. Not even the Knicks shoot that bad on an off night.
From deathwatch to def watch.
Pity poor Garmin (GRMN), which was to high-tech devices what Yahoo (YHOO) was to search engines. Smartphones rendered much of its GPS product line irrelevant, and Garmin lost its way in 2007-08, plummeting from $119 to $19 in 14 months. But in the last 12 months, a product line of multi-sport fitness watches has helped GRMN jump more than 40 percent. Next up: the just-announced GPS smartwatch Fenix 5X, which will run $700.
An underperformer.
Though up 6 percent so far in 2017, Under Armour (UA) hasn’t lived up to its motto, “Protect this house.” Since the stock split, it has slumped and trades at around $30. If the trendy brand is hitting some consumer fatigue here, that’s hardly the issue overseas. “It doesn’t really have a presence in Asia,” Thibault says, “With its valuation of 59 times earnings and virtually no foothold in the fastest-growing sports apparel markets, UA is a company we wouldn’t recommend for the near term.”
Worse for wear.
Since going public in 2015, Fitbit (FIT) hasn’t capitalized on its robust share of the wearables market. In the first half of 2016, the stock plunged more than 57 percent. Since July 1, it’s dropped another 37 percent and trades at about $8 per share — well off its 2015 high of $47.50. Hopeful-but-cautious investors now track FIT’s every step; 13 Wall Street analysts call it a “hold,” with three in the “buy” territory and two labeling it an “underperform” or “sell.”
Marathon runner.
Not many sportswear companies can claim the devotion of top hip-hop artists. Yet Adidas AG is no mere fashion statement, unless bling is your thing. The “brand with the three stripes,” which also owns Reebok, trades on Germany’s ETR exchange for 144.80 euros (about $153) and has continued to climb since January 2009, up 444 percent. “Adidas trails Nike slightly in China but has taken the sales lead in Japan,” Thibault says. “The two companies should continue to benefit from their duopoly in the Asian sportswear market.”
Stretching into a comfy position.
The ladies love Lululemon Athletica (LULU), as the Canadian company’s red totes are legion: festooned with quotes such as “Friends are more important than money.” But tell that to shareholders, who saw LULU plunge a third between August and October. The yoga apparel maker threw the market into a downward dog despite posting stronger-than-expected second quarter revenue, up 15 percent. Yet since Dec. 2, the stock has jumped more than 20 percent and trades at around $70 per share. Another net revenue jump (13 percent) and a $100 million stock buyback helped LULU get off the mat.
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