The New Year is many things to many people. For some, it’s a chance to start a new fitness routine and lose a few pounds. For others, it’s a time to take up a new hobby like playing guitar or gardening. But for sports fans all across the world the New Year means one thing; a virtual tsunami of high-profile sporting events and playoff games.
Some of the best tournament action of the year is crammed into a 4-month sporting extravaganza that kicks off in early January with the College Football Bowl Championship Series. Up next is the extremely popular NFL playoffs, where average people like you and I can watch millionaires throw themselves across the field like little kids dancing on the playground.
Dunk and Gaze
Just as you’re about to dunk your tortilla chip in some guacamole, the greatest tournament in the world grabs the spotlight, the College Basketball National Championship Tournament, where 64 of the countries best college basketball teams duke it out for the right to call themselves “The Best.”
By the time you start sweating from the spicy been dip and specialty brew, the NBA and NHL playoffs shift into high gear, set for a soft landing in early spring just as the newly minted baseball season steals the attention of sports nation USA.
Junk Food Rules
With this many people glued to the TV for this long, you know someone is bound to get either hungry or thirsty, and that’s when the real party begins. This playoff bonanza has sports fans across the world stuffing themselves with pizza, wings and beer for four months while rooting for all their favorite teams. So much for that New Year’s resolution.
So if you’re interested in fattening your wallet instead of your gut, you might want to take a look at these 4 playoff stocks that do well when sports fans pour it on and eat and drink themselves into a tizzy. But be careful, you just might find yourself behind a tidal wave of buying as the power play takes hold.
4 Stocks for the Playoffs
Buffalo Wild Wing (BWLD) posted very consistent results in a challenging 2009, beating in all four quarters by an average of 3 cents, or 9%. Just the other day, shares of BWLD jumped above a short-term level of resistance at $42 ahead of the company’s Feb 11 Q4 results. The next-year estimate is bullish, pegged at $2.11, a solid 21% growth projection.
Domino’s Pizza (DPZ) recently spiked higher on optimism about the company’s new pizza recipe that has been getting strong customer reviews. The company beat the Zacks Consensus Estimate by 13% in its October Q3 results, marking four consecutive surprises over the last year by an average of 14%. The next-year estimate is bullish for this Zacks #2 rank stock, projecting 13% earnings growth.
Hormel Foods Corp. (HRL) is trading with a forward P/E of 14X with a solid next-year estimate projecting 10% earnings growth. HRL is another Zacks rank #2 stock with a very consistent earnings history, beating the Zakcs Consensus Estimate in each of the last four quarters by an average of 15%.
Boston Beer Company (SAM) jumped higher on Nov 24 when it reported better than expected Q3 results that included sales growth of 6% from last year and an 80% earnings surprise. This Zacks #2 rank stock has been crushing expectations for the last 3 quarters with an average earnings surprise of more than 100%. Estimates have responded accordingly, with the current year up 19 cents in the last month to $2.24. The next-year estimate is calling for respectable 7% earnings growth.
Keep Your Eyes Peeled
You never know where your next great investment idea is going to come from. Sometime its right in front of our faces, more literally than we even realize.
Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Surprise Trader Service. Zacks Investment Research
