After another action-packed weekend in the NFL, I couldn’t help but think about a couple companies I traditionally relate to — and that have exposure to — football season. (Football’s “trading” season is a little different than the NFL season, though. For stocks, I exclusively look at the September-December period of a given year.)
Hibbett Sports (NASDAQ:HIBB) operates a chain of sporting goods stores serving small to mid-size markets. In total, the company has 837 stores in 26 states, and sports a market capitalization of $1.55 billion. While the stock has rallied roughly 30% year-to-date, it has mostly traded in a wide trading range since May.
After looking at the seasonal tendencies of Hibbett’s stock performance, what intrigued me was the stellar rallies it has had in the September-December period during the past 10 years. Except for 2007 and 2008, HIBB rallied between roughly 25% to 60% each September-December period since 2003. During the volatile autumns of 2007 and 2008, the stock performed poorly along with the rest of the market — but that shouldn’t be surprising, given its cyclical nature and a beta of 1.10 versus the S&P 500.
Click to Enlarge On the accompanying chart, I marked the September-December period for each year all the way back to 2003. Green bars reflect positive performance for the stock; red bars mark negative performance.
To be sure, the S&P 500 also has had a good tendency for rallies during that same period, excluding 2007 and 2008. What stands out about HIBB, however, is the magnitude of its rallies during the past four months of the year despite a historically good correlation to the S&P 500 itself.
Click to Enlarge On the charts, HIBB currently is wedged within two trading ranges. The larger one dating back to May spans from $53.50 to $63.40, and the smaller one $58 to $60.80. If history is any guidance — and the broader market also manages to move higher through December — this stock shouldn’t have too much difficulty breaking above the year-to-date high at $63.40.
Another stock I find myself looking at during each football season is Buffalo Wild Wings (NASDAQ:BWLD). Each year, football fans rush to these casual dining restaurants to get their fix of chicken wings and sports.
Click to Enlarge The stock’s performance during the last four months of the year historically hasn’t been nearly as amazing as that of Hibbett, but on the charts, Buffalo Wild Wings currently sits at a crucial point.
BWLD has repeatedly found resistance around the $89 mark since May. Just the other day, on Oct. 5, the stock tried to push above the resistance level but failed to do so and left an ugly red bar on the charts.
Given that (by my count) this is now the stock’s fifth attempt since May at piercing through $89, and given that BWLD is currently displaying not-very-overbought momentum oscillators, the stock should blow past $89 sooner rather than later on its way to new highs for the year. A buy signal does not occur until the stock has moved above $89.
Serge Berger is the head trader and investment strategist for The Steady Trader. Sign up for his free weekly newsletter.