The stock market has been on a tear this year with the S&P 500 up 27%, fueled in part by the Federal Reserve’s easy money policies. It would mark the best performance since 2007 if the gains hold the last week of the year. In the sports world, the performance has been even more dramatic with the basket of 37 stocks below up 53% on average. These companies touch all facets of sports including retailers, apparel makers, broadcasters and sports team owners.
Leading the way is Evansville, Ind.-based Escalade, which manufactures recreation, fitness and hunting products under a variety of brands. The thinly traded stock is up 137% year-to-date, yet still carries a healthy dividend yield of 3%. The company is made up of two segments and they are moving in opposite directions. Sales for the sporting goods business, which is 81% of the company, were up 20% in the first nine months of the year, while sales at its office products group based in Europe fell 18%.
The 86-year-old company was hit hard by the Great Recession and the loss of Sears as a client at the same time. The stock sunk to $0.46 in March 2009. It rebounded by focusing on high-end archery and hunting gear and securing deals with new retailers like Dick's Sporting Goods DKS +0.19%. The stock recently traded at $12.
Fitness company Nautilus was the second best performer, up 133%. The Vancouver, Wash. company, which sells products under the Nautilus, Bowflex, Schwinn Fitness and Universal brands, was the top sports stock in 2012 with a gain of 106%. Nautilus took a beating during the recession and posted four straight years of negative earnings and the stock sunk below $0.50. The company underwent a massive restructuring and returned to profitability in 2010. Wall Street has sent the stock soaring, but there are still skeptics as the stock trades at a price earnings multiple of only 5.
The stock of the biggest fish in the sports apparel world, Nike, jumped 52% this year to a recent $77. Nike offers one of the few global brands in sports, which helped the company generate $25.8 billion in revenue over the last 12 months. It dominates the basketball category with a combined market share of 92% in the U.S. for the Jordan/Nike brands, according to research firm SportsOneSource. Overall, it has a 59% share in sports footwear. Nike is focused on its core brands that are its most profitable and offer the best growth prospects. It sold its Umbro soccer division at the end of last year and dumped Cole Haan at the beginning of 2013. Analysts expect earnings to hit $3.49 for the fiscal year ending May 2015.
Two high profile companies were the worst two performers in the sports category in 2013. The stock of global soccer powerhouse Manchester United rose only 8% in 2013. Malcolm Glazer bought the famed club in 2005 for $1.5 billion and gave individuals a chance to buy a piece in August 2012 with an initial offering priced at $14 a share. The stock has not done much since, but it has attracted prominent investors like Steven Cohen and George Soras. United ranks as the second most valuable sports franchise in the world behind only Real Madrid, but lost its manager, Sir Alex Ferguson, who retired in 2013 after 27 years leading the club. The shares currently trade at 12 times earnings.
Yoga apparel firm Lululemon Athletica was the worst performing sports stock of 2013, down 22% after a string of mishaps during the year. In the spring, the company recalled its black Luon yoga pants, which were deemed too sheer along the backside. It triggered the departure of chief product officer Sheree Waterson, and CEO Christine Day also announced plans to leave. Company founder Chip Wilson put his foot in his mouth in November during anappearance on Bloomberg TV where his explanation for the sheer pants included gems like: “Some women’s bodies just actually don’t work,” and, “It’s about the rubbing through the thighs.” The company added to its stock woes this month with a disappointing fourth quarter outlook that sent the stock down 11% that day.
| Total Return YTD | Recent price | Market cap ($mil) | PE | Sales ($mil) | |||
|---|---|---|---|---|---|---|---|
| Escalade | 137% | $12.00 | $162 | 15 | $158 | ||
| Nautilus | 133 | 8.18 | 255 | 5 | 207 | ||
| Pacific Sunwear of California | 105 | 3.26 | 224 | NA | 782 | ||
| World Wrestling Entertainment | 101 | 15.40 | 1,156 | 103 | 505 | ||
| Quiksilver | 103 | 8.63 | 1,457 | NA | 1,861 | ||
| Under Armour | 77 | 86.04 | 9,088 | 62 | 2,155 | ||
| Jarden Corp | 73 | 59.78 | 7,694 | 31 | 6,960 | ||
| Polaris Industries | 70 | 141.57 | 9,804 | 28 | 3,594 | ||
| Arctic Cat | 69 | 56.10 | 754 | 19 | 691 | ||
| Sturm, Ruger | 65 | 72.89 | 1,410 | 14 | 648 | ||
| Electronic Arts | 62 | 23.54 | 7,274 | 33 | 3,775 | ||
| VF Corp | 65 | 61.45 | 26,989 | 23 | 11,163 | ||
| Brunswick | 56 | 45.37 | 4,122 | 24 | 3,816 | ||
| Black Diamond | 57 | 12.91 | 415 | 199 | 191 | ||
| Cabelas | 55 | 64.61 | 4,562 | 22 | 3,531 | ||
| Nike | 52 | 77.34 | 69,142 | 27 | 25,810 | ||
| Head | 42 | 2.16 | 180 | 57 | 455 | ||
| Dover Motorsports | 49 | 2.47 | 91 | 20 | 46 | ||
| Walt Disney | 47 | 72.40 | 130,320 | 21 | 45,041 | ||
| Big 5 Sporting Goods | 44 | 18.46 | 411 | 15 | 989 | ||
| Finish Line | 48 | 27.77 | 1,338 | 21 | 1,526 | ||
| Vail Resorts | 40 | 75.03 | 2,710 | 124 | 1,128 | ||
| Columbia Sportswear | 43 | 75.33 | 2,597 | 27 | 1,653 | ||
| Adidas | 40 | 61.51 | 25,738 | 39 | 18,620 | ||
| Daktronics | 39 | 15.13 | 647 | 29 | 536 | ||
| Churchill Downs | 37 | 90.00 | 1,618 | 26 | 776 | ||
| Johnson Outdoors | 40 | 27.79 | 275 | 14 | 426 | ||
| Callaway Golf | 31 | 8.48 | 632 | NA | 836 | ||
| Zumiez | 36 | 26.37 | 799 | 27 | 722 | ||
| Foot Locker | 30 | 41.11 | 6,242 | 15 | 6,427 | ||
| Dicks Sporting Goods | 27 | 57.11 | 7,031 | 22 | 6,071 | ||
| Hibbett Sports | 27 | 66.98 | 1,726 | 24 | 852 | ||
| Madison Square Garden | 25 | 55.48 | 4,264 | 55 | 760 | ||
| International Speedway | 25 | 34.47 | 914 | 30 | 613 | ||
| Speedway Motorsports | 15 | 20.00 | 828 | 20 | 481 | ||
| Manchester United | 8 | 15.23 | 2,495 | 12 | 630 | ||
| Lululemon Athletica | -23 | 58.80 | 8,538 | 31 | 1,556 | ||
| Year-to-date stock performance through Dec. 20, 2013. NA: Not applicable.Sources: Interactive Data and Thomson Reuters Fundamentals via FactSet Research Systems. | |||||||
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