Sports actions beat market in September, led by teams and leagues –


Sports teams and leagues led the JohnWallStreet Sports stock index to its second straight outperformance against the S&P 500, even as a volatile market dragged both the broad market and the sports index towards the low in September.

SporticoThe benchmark sports stocks index fell 2.5% during the month, ending at 1,693.74, a level that still means sports stocks are up 19.4% since the start of the month. ‘year. The broader market, meanwhile, slipped 4.8% in a volatile September that saw growth stocks rocked by inflation fears and planned reductions in asset purchases that the Federal Reserve Bank has used it to prop up financial markets since the mortgage crisis of 2008. Yet the S&P is up 14.7% in 2021. The JohnWallStreet Sports stock index has beaten the S&P five out of nine months this year .

The sports index gains came mainly from live sports in September. Manchester United, listed in the United States (MANU) added more than 10%, as the team revealed a 140% increase in broadcast revenue, to the equivalent of $ 54 million, during its fourth quarter ended in June. The presence of fans in English Premier League stadiums this season, as well as the return of fan favorite Cristiano Ronaldo to Old Trafford, also heightened the sentiment. Endeavor Holdings, parent of the Ultimate Fighting Championship (EDR), gained more than 12%, mainly due to its plan to buy OpenBet, the sports betting technology business of Scientific Games (SGMS), himself a member of the index and the biggest winner at 14.5%. Churchill Downs (CHDN), the owner of the Kentucky Derby, has rallied more than 14% with the company benefiting from a $ 500 million share repurchase plan and an injection of funds from a planned sale of its suburban racetrack from Chicago to the Chicago Bears.

World Wrestling Entertainment (WWE, up 8.6%), the Atlanta Braves in the playoffs (BATRA, up 3.1%), owner of the Knicks and Rangers, MSG Sports (MSGS, up 4.4%), and Formula 1 in motor racing (FWONA, up 3.7%) were also among the leaders of the month. Overall, 17 of the 40 components of the sport index increased in September.

Investors reacted badly to DraftKings (DKNG) $ 20 billion offer on UK-based Entain, with stocks immediately plunging into the plan and giving up 20% of their value to close the month. DraftKings offers $ 9 billion more than Entain offer rejected by MGM Resorts (MGM) at the beginning of the year. MGM issued a statement saying any deal involving US operations requires her consent, as she and Entain are 50-50 partners on BetMGM. “While DKNG could then become the world’s largest operator, we see potentially intractable governance hurdles with BetMGM,” said stock analyst Tuna N. Amobi in a CFRA research note. “We believe the unexpected news highlights the potential land grab in the nascent online sports betting market, as some of the major players scramble for a larger scale in the wake of legalization in US jurisdictions.”

Other sports stocks were down, due to a general rotation of growth towards value stocks, a defensive move in an uncertain stock market environment. This reduced the actions of Hall of Fame Resort & Entertainment (HOFV, down 20%), FuboTV (FUBO, down 13%) and Penn National Gaming (PENN, down 11%), among other decreases.

The JohnWallStreet Sports Stock Index is a collection of 40 stocks intended to reflect the state of professional sport. The index started in August 2020 with a value of 1,000 and is rebalanced on a quarterly basis, meaning that each stock is reset to a weight of 2.5%.

As part of this quarter’s rebalancing, two new stocks are added to the index and two discontinued. Sports data and analytics company Sportradar (SRAD) joined the Sportico after going public in September, valuing the company at $ 8 billion. Rush Street Interactive (RSI), a gambling company with a strong focus on sports betting, also joins the index. Mudrick Acquisition II (SLUDGE), the SPAC which had an agreement to make the trading card giant Topps public. That deal was scuttled just days before a shareholder vote, after Fanatics struck a deal with MLB and MLBPA for baseball cards and other collectibles. The Mudrick SPAC is not specifically a sports-oriented vehicle, and the more than 150 active PSPC sports-related assets and their $ 47 billion in committed or proposed capital are represented in the index by RedBall (RBAC), as well as three ongoing SPAC mergers.

Media & Gaming Score (SCR) is leaving the Index due to its imminent acquisition by Penn National. Penn is paying $ 2 billion for the Toronto-based company to gain a foothold in the sports betting market in Canada. Since mid-August, sports betting is no longer illegal at the federal level in Canada.

To be included in the Sportico index, stocks must be traded in sufficient volume on a US stock exchange and have a minimum market capitalization of $ 50 million. Companies that do not meet the requirements, experience a significant corporate event (think: bankruptcy, sale), or pivot into a strategy away from professional sport may be removed from the index.

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