The World Cup is just around the corner…! 30 sports stocks that are expected to be in great shape from fall | FRIDAY DIGITAL

The World Cup is just around the corner…! 30 sports stocks that are expected to be in great shape from fall

Shohei Otani's great success, soccer and rugby World Cup, WBC Asics, Descente, sports clubs, and some unexpected stocks that at first glance may seem unrelated

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Samurai Japan is expected to win the WBC for the first time since 2009. Depending on Otani’s participation, the level of attention and economic impact will likely vary greatly.

Following last year’s excitement over the Tokyo Olympics, this year’s sports festivals will be full of events: the World Cup group leagues for soccer will begin in November, and in baseball, “Samurai Japan,” which will play in the WBC, will start its training games. In baseball, “Samurai Japan,” which will compete in the WBC, will start its season with a training match. Rugby, too, will start its test matches in preparation for next year’s World Cup. Of course, we cannot take our eyes off the performance of Shohei Ohtani of the Major League Baseball, who will be named MVP for the second year in a row.

In addition to a string of sporting events, recent years have seen a marked increase in health consciousness. Therefore, investment professionals are unanimous in their expectations for growth in sports-related stocks this fall. Let’s take a look at what kind of stocks to keep an eye on.

First of all, the name of ASICS, a long-established sporting goods manufacturer, can be mentioned as a “sports stock” on the high street. Hirokazu Komatsu, an analyst in the Japan Equity Information Department of DZH Financial Research, explains about ASICS, the company that produced the official apparel for the Tokyo Olympics.

Running is becoming increasingly popular not only in Europe and the United States, but also in Southeast Asia. In addition, the fact that marathons are being revived in the after-corona also seems to be providing a tailwind. ASICS has been proactive in increasing its corporate value, such as by making the company that operates the runner information-sharing portal site “RUNNET” a Group company. This is also a positive factor. Whenever there is a major sporting event, a well-known stock like ASICS will move, so be sure to check it out.

Incidentally, ASICS has an excellent shareholder special benefit program: holders of 100 shares or more can obtain 10 20% discount coupons that can be used at directly managed stores and 10 25% discount coupons that can be used on the company’s e-commerce site (twice a year). The company is involved in not only running shoes but also sportswear and leather shoes, so the use of the coupons is surprisingly wide-ranging.

Tailwind for After Corona

Bic Camera, a major electronics retailer, is another sports-related stock that often attracts attention for its tasty special benefit packages.

He says, “It depends on how well the Japanese national soccer and rugby teams win, but I expect that the World Cup will spur demand for new TVs. In the case of Bic Camera, holders of 100 shares or more are entitled to a total of 3,000 yen worth of special benefit coupons per year, and in addition, the company has been paying dividends every year for the past several years. Even if the stock price does not explode in the coming season, it can be said that there is little to lose if you hold the stock for a long period of time.

Stocks related to “sporting events,” which have been restricted in some ways by the COVID-19 crisis, are likely to rebound in the rush of events this fall and beyond. Market advisor Hideo Amano is focusing on the recovery in demand for “bars” where people can watch sports games.

Kirin Holdings, which has long been an official partner of the Japanese national soccer team, may see an increase in commercial exposure during the World Cup, which could lead to higher sales. In terms of restaurants, we expect HUB, which operates the “British-style pub HUB,” to attract more customers. Although its performance declined during the COVID-19 crisis, it is expected to recover to some extent from this fall onward.”

In terms of demand recovery, sports club-related companies, which lost members across the board due to the Corona disaster, remain “bargain stocks. Which stocks have remained relatively stable in a stock market that continues to experience unstable price movements? The following is from Tsuyoshi Nishimura, a securities analyst and representative of Fairtrade, Inc.

I would recommend Central Sports, a major comprehensive fitness club operator. Central’s strength is its swimming schools, but in recent years it has also been focusing on operating small gyms that are open 24 hours a day. There are more people than expected who want to exercise their bodies in the wake of the world sporting championships, and there is a strong possibility that the price will rise in line with the excitement of the championships. The company has a large amount of cash relative to its market capitalization, and its solid financial base is also a favorable factor. It also has the advantage of having a low percentage of foreign holdings, making it less susceptible to the influence of overseas markets.

One should not forget about the athlete-related goods business, which is expected to directly boost sales. Tomotaro Tajima, an economic analyst, names two companies.

For example, Goldwyn, which develops outdoor brands such as The North Face, merged this year with the Canterbury brand, which is famous for its rugby wear. Canterbury produces the official jerseys for the Japanese national rugby team, and we will be watching the growth in sales of replica jerseys in the future. Descente, a subsidiary of ITOCHU, is a major sportswear company that supplies undershirts to Shohei Otani. It also owns the Umbro brand, which is popular among soccer players, and we expect the popularity of sportswear in general to heat up.

What are the most promising stocks to buy by association?

What are some unexpected stocks related to sports that it is not too late to stock up on? Mr. Tojo mentioned one stock.

Saunas are becoming more popular as people become more health-conscious, so Econac Holdings, which operates the Thermayu bathhouse, is a good stock to consider,” he said. There is no zero demand for people who want to watch sports games in the sauna, and a new store will open in Nishi-Azabu early next spring. Low-priced stocks go up all at once when their prices rise, so you can hold on to them without letting them go; buying 100 shares will cost you around 9,000 yen, so you won’t lose much.”

Buying stocks of companies that are not directly related to the topic is called “associative buying,” and a certain technology-related giant may be getting some associative buying, says the aforementioned Amano, who is also a member of the Tokyo Stock Exchange. Amano, the aforementioned “associative buying,” says this.

One example is a facial recognition system that uses AI in sports. One example is a facial recognition system that automatically recognizes visitors and related persons at stadiums and allows them to enter without a ticket. NEC is the leading company in its development.’ At the 1919 Rugby World Cup, NEC’s system was used at Tokyo Stadium and Yokohama International Stadium to identify people when they enter the media. This technology may be adopted at stadiums around the world as well.”

When one thinks of global sports companies, brands such as Adidas and Nike may come to mind. However, both companies are not listed on the Japanese stock market, and it is a hurdle to suddenly buy individual stocks. In such cases, investment trusts can be effective.

Investment trusts are also a good way to hold on to stocks related to sporting events held in other countries. Nissay Asset Management’s Nissay World Sports Fund, which can invest in a comprehensive range of foreign stocks, is also worth considering,” says Tojo.

Buying stocks and cheering for the team may be a new way to enjoy sports.

The World Cup Soccer Tournament will be played in the “Group of Death,” which is crowded with powerful teams such as Spain. We hope that Japan will make it through the group leagues.
There is also demand for TVs to watch Internet videos on a large screen. Bic Camera is attractive for its high point redemption.
Overseas sales account for about 70% of ASICS sales. Many professional soccer players wear ASICS spikes.
NEC’s face recognition system is being introduced at airports and other locations. The system was also used to identify athletes and staff at the Tokyo Olympics.

From the September 23, 2022 issue of FRIDAY

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