While soccer may be the world’s most global sport, Americans love football. It’s a religion and all sacrileges against it will be penalized accordingly. And with the big game less than a week away — go Bengals! — it may be time to explore Super Bowl stocks to buy or sell.
As you might expect with one of the biggest events — if not the biggest event — in American popular culture, market superstitions surrounding the Super Bowl have sprouted. Most notably, “Leonard Koppett, a sportswriter for The New York Times, first introduced the Super Bowl Indicator in 1978.” Apparently, up until that point, the indicator had never been wrong — theoretically boding well for Super Bowl stocks.
Apparently, the thesis (if you even want to call it that) goes like this. If a team from the National Football Conference (NFC) wins, the market will rise throughout the year. However, if a team from American Football Conference (AFC) wins, the opposite trend occurs. So maybe I shouldn’t root for the Bengals, not only for the sake of Super Bowl stocks but for every available security.
However, a closer examination of the facts reveals — hopefully unsurprisingly — that the indicator is irrelevant. Sometimes it’s right, but correlation does not imply causation. What is significant, though, are commercials for the matchup. From a Variety.com report, “Super Bowl LV generated approximately $545 million in in-game advertising.” So very likely, there will be a host of winners among Super Bowl stocks.
At the same time, some companies will wish that they kept their money in their pocket. So, with all of that in mind, below are a list of what I believe to be the Super Bowl stocks to consider and those you may want to avoid.
- PepsiCo (NASDAQ:PEP)
- Nike (NYSE:NKE)
- Booking (NASDAQ:BKNG)
- Disney (NYSE:DIS)
- Rakuten (OTCMKTS:RKUNF)
- DraftKings (NASDAQ:DKNG)
- Coinbase (NASDAQ:COIN)
- Meta Platforms (NASDAQ:FB)
- Nissan (OTCMKTS:NSANY)
- Wallbox (NYSE:WBX)
Before we get into it, you shouldn’t take this article too seriously. Generally, it’s not wise to make investments simply on the basis of a single event, whether Super Bowl stocks or some other categorization. In other words, please don’t get worked up: this is just one opinion among several.
Super Bowl Stocks: PepsiCo (PEP)
One of the greatest marketing devices about the big game is that you don’t have to understand football to appreciate the Super Bowl’s pageantry. Let’s face it: other sports are intuitive because a ball or puck goes somewhere, either through the goal posts, in the net or out of the park.
In football, you can technically win a game without a deliberate point-scoring action by an attacking team. Furthermore, the playbook of a professional football team is the size of the King James Bible.
However, through entertainment centerpieces like the halftime show, plenty of people will be tuning in. What’s more, PepsiCo owns sponsorship rights to the program. However, they’re set to expire after 2022. Since just the halftime show is worth $25 million to $50 million per year to the NFL, there’s a chance it could sell the asset rights separately.
Of course, PepsiCo could still renew a deal with the NFL. For now, though, it’s going to make the most of its time with an advertising blitz. Since Americans love the brands that it sells like Frito-Lay, PEP stock could be a winner among Super Bowl stocks.
While the big game probably won’t move the needle much for the sports apparel giant, it’s worth noting that Nike signed an exclusive apparel-supplier contract with the NFL.
With that in mind, Super Bowl gear is always a hot commodity before and after kickoff. In fact, fans of both the Cincinnati Bengals and the Los Angeles Rams have been buying conference championship and Super Bowl apparel like crazy.
Additionally, another catalyst for Nike and NKE stock was the recent reveal of the new name of the NFL team in our nation’s capital: the Washington Commanders. It took 18 long months, but the organization finally decided on the new nickname after its prior one stirred plenty of controversies. Nonetheless, fans of the team seemed to be in favor of the decision. A number of apparel items flew off the shelves the day the “Commanders” name was announced, and it quickly became a top item to buy across the league.
So, while the Super Bowl may not be a major help to Nike, apparel sales from a variety of sources definitely won’t hurt the outlook of NKE stock.
Super Bowl Stocks: Booking (BNKG)
Everyone loves Idris Elba. A brilliant actor with unparalleled wit and charm, many saw him as the go-to replacement for Daniel Craig to play the iconic James Bond. However, some conservative critics did not like the idea because Bond is a character with Scottish origins.
Elba, on the other hand, is English.
I’m not sure why it matters. But if the minds of the decision-makers don’t give Elba a license to kill, it won’t be that much of a loss. He’s still extremely popular, as evidenced by the fact that he’ll be featured in a Super Bowl commercial for Booking.com, the platform under travel technology firm Booking.
Of course, the mere presence of Elba alone probably won’t change Booking’s fortunes indefinitely. But the thing is, viral commercials have a way of sticking in the brain long after the broadcast is over. What’s more, American consumers are tired of the new normal. Instead, they’d much rather get out of the house and reclaim their daily routine.
With that in mind, I think Booking made a smart decision to take advantage of the backdrop — making it one of the Super Bowl stocks to buy.
When it comes to the topic of Super Bowl stocks, you can’t ignore Disney. For several years, it has become tradition for the MVP of the big game to yell the classic line, “I’m going to Disney World!” Thus, even if Disney or any of its subsidiaries did not have an ad presence for the Super Bowl, it will surely find a way to make the brand known.
Coincidentally, this year’s edition will take place in Los Angeles, the entertainment capital of the world. Organically, this is a huge plus for DIS stock as Disneyland is a relatively quick drive south to Anaheim. But more importantly, the winter weather has been rough throughout much of the country. In California, though, it’s bright and sunny almost year-round.
That’s going to have a lot of folks thinking about a vacay to the Golden State. Logically, if you’re a first-timer to California, you’re going to want to visit the hotspots which include Disneyland and other Disney-associated theme parks.
For everyone else, the entertainment giant will be pumping out compelling films this year. So this may be one to watch.
Super Bowl Stocks: Rakuten (RKUNF)
Admittedly an unorthodox idea for Super Bowl stocks, Rakuten is a Japanese e-commerce and online retailing company. I’m not too familiar with it other than to say it’s like the Amazon of Japan. Featuring various businesses such as financial services via fintech solutions, digital content and communications, e-book distribution and mobile-carrier services, Rakuten seemingly does it all.
Even more intriguing, it’s coming to America. Apparently, it has a big reveal planned for the big game, drawing intrigue for onlookers.
If Rakuten’s expansion efforts are successful, RKUNF stock is an equity unit that may attract attention, if only for its “cheap” price. At less than $9 per share now, that would sound psychologically appealing for what could be the next big thing in e-commerce.
Better yet, Rakuten may enjoy the highest return on investment regarding its Super Bowl commercial. Every American is familiar with names like Amazon (NASDAQ:AMZN) and increasingly Shopify (NYSE:SHOP). But on a psychological basis, these shares are priced into the stratosphere. But Rakuten? As a single-digit trade, onlookers might start getting some meme-ish ideas.
Overall, I consider this a dark horse play among Super Bowl stocks.
As I mentioned near the top, not all Super Bowl stocks will be winners. From here on out is a list of companies that might not enjoy a bump from the final football game of the season, beginning with DraftKings.
On the surface, DraftKings seems like one of the Super Bowl stocks to buy considering its underlying platform. Clearly, the resumption of professional sports was huge fundamentally for the sports-betting platform. However, the market has had a rather dim view of DKNG stock, with shares sinking 26% on a year-to-date (YTD) basis.
What gives? A major part of the problem could be that so much speculation has been built into the equities market over the last two years, with stock trading on margin near-record heights. That’s fine and all, but once sentiment fades, it could be bad news.
Obviously, with the Federal Reserve signaling a hawkish policy after letting loose the monetary spigot earlier, investors see more value in stable, dividend-yielding names. Thus, I’d be super careful about DKNG stock.
Super Bowl Stocks: Coinbase (COIN)
If you’ve followed my work over the last few years, you’ve likely picked up on the fact that I’ve long been a supporter of cryptocurrencies. Therefore, it pains me to say that investors should be careful about Coinbase, one of the most popular exchanges for everyday folks to exchange paper money for digital.
Coinbase does have plans for the big game, and the brand has almost become synonymous with virtual currencies, at least in the U.S. market. Therefore, the company could pick up on residual excitement for which its rivals are picking up the tab. So, why isn’t COIN stock one of the Super Bowl stocks to buy?
Simply, the underlying sector is suffering through a rocky period. While I hope it recovers, a bear market in digital assets would likely be painful for COIN stock.
Meta Platforms (FB)
The company formerly known as Facebook has grand plans for the Super Bowl. That’s according to AdAge.com, which noted that Meta Platforms recently gave the first tease regarding its advertising campaign with new online avatars with virtual NFL merchandise available for its platform users. Naturally, the move nods at the company’s pivot to the metaverse.
While my InvestorPlace colleagues can better explain the metaverse than I could, I define it as the next generation of connectivity. Whereas prior internet-based innovations allowed computers to connect across borderless channels with greater depth and substance, the metaverse enables users to integrate their personalities in a digital space.
To the luddite, it all sounds crazy. But with innovations in virtual and augmented reality, it’s never been easier for people to have an immersive experience when online. So, what could go wrong?
Well, a 26% collapse in the share price following a soft earnings performance and a disappointing outlook, for starters. Though it’s possible that the market is overreacting to the weaker-than-expected print, it may also be that investors don’t have the confidence that Meta will be relevant in the years ahead as it was during the trailing decade.
Super Bowl Stocks: Nissan (NSANY)
With the Super Bowl facilitating a captive audience — especially if the game is a tight one — companies shelling out the dough for a commercial spot can potentially enjoy a serious return-on-investment (ROI). However, I don’t think Nissan will be one of them.
Although this is strictly my opinion, I can’t help but feel Nissan is an embarrassment to the automotive community. I blame — who else? — the French. As you may know, Renault (OTCMKTS:RNLSY) owns Nissan so it bears some responsibility for allowing the company to showcase its upcoming Nissan Z sports car.
Here’s the thing — sports cars are dying. According to a 2016 Bloomberg report, sales of these otherwise exhilarating rides were fading. Fast forward into the new normal, and this vehicular category has not demonstrated viable signs of turning the ship around. So, if you’re going to get people excited about an unpopular segment, you’ve got to dial up the sexiness factor by 10X.
For me, the derivative design — particularly the goofy and anachronistic front grille — is a deal-breaker. Thus, this is one of the Super Bowl stocks I’m staying away from.
Before I get deluged with hate mail, let me reassure the internet audience that I love electric vehicles (EVs). Everybody says EVs are the future. So is hydrogen, the metaverse, blockchain and Web 3.0 applications.
But strictly for entertainment purposes and to add a little diversity to this list of Super Bowl stocks, I’m going to have a little discussion about Wallbox, the EV charging brand. On the positive side, the company is about to launch its first-ever commercial — and during the Super Bowl no less.
You couldn’t ask for a better spotlight, right?
Perhaps not. However, Wallbox may run into the chicken-or-egg problem; That is, it’s fine to provide the infrastructure for EVs. But currently, they’re too expensive for the average household. Even more problematic, many people have been forced to buy used cars at crazy premiums.
Such folks are going to wait before making the transition to EVs, which unfortunately may put Wallbox in a bind.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.