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The Best And Worst Sports Stocks Of 2013

Dec 23 2013, 1:07pm CST | by

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The Best And Worst Sports Stocks Of 2013
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The Best And Worst Sports Stocks Of 2013

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. 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 an appearance 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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