Skip to main content

Fantasy Football Stocks for the 2010 Season

These stocks are primed to parlay the NFL's big money into big gains for your portfolio

BALTIMORE (Stockpickr) -- The 2010 National Football League regular season kicks off tomorrow night at 8:30 p.m. with a face-off between the Minnesota Vikings and the defending Super Bowl XLIV Champions, the New Orleans Saints. But this year, forget about fantasy football. With a handful of football-affiliated stocks, you could parlay the NFL's big money into big gains for your portfolio.

Here's a glimpse at

four stocks primed to do just that

.

While the connection between the NFL and investing might sound like a stretch, it's not. With an average team value of $960 million, the NFL is the most valuable sports league in American sports, and savvy investors have been looking for ways to profit from that for decades. From dubious stock predictors such as the Super Bowl Indicator, which predicts whether the market will have a bullish or bearish year based on which team wins the Super Bowl, to Ari Gold-esque attempts at investing in NFL teams, everyone's vying for a piece of the action.

Unfortunately for retail investors, it's not particularly easy to invest in an NFL team. With the exception of the Green Bay Packers, who have issued 4.8 million nontransferable shares since 1923 (the team is a non-profit, so shareholders have only voting rights -- no dividends or appreciation of shares), team ownership is predicated on billionaire status and league approval.

But there are lucrative NFL deals available to individual investors.

The most accessible path to football profits can be found by investing in

some of the publicly traded companies

that have already inked lucrative deals with the league. These four stocks could see their top-line numbers swell this season as football fever catches on.

2010 has already been a year of strong performance for

Under Armour

(UA) - Get Under Armour, Inc. Class C Report

. The athletic apparel company has seen its shares rally more than 40% since the first trading day of January. With an expanding product portfolio and increasing exposure, this stock could continue to perform for owners this year.

A relative underdog to the sports apparel business, Under Armour made strategically smart decisions in securing athlete endorsements. Instead of turning to the league's biggest stars, the company focused on signing deals with then up-and-comers such as Vernon Davis and A. J. Hawk. Those moves saved capital for the firm's fast-paced growth into footwear and the international markets. At the same time, investing in rising stars has helped build 14-year old Under Armour's brand equity in record time.

TheStreet Recommends

While shares of the stock are far from cheap right now relative to peers, the company's stellar growth potential is unmatched in the sports apparel industry right now. If Under Armour can keep its top-line numbers rising, those lofty share prices will be more than warranted.

On the other end of the size spectrum is

Nike

(NKE) - Get NIKE, Inc. Class B Report

, which with a $35.8 billion market cap rings in at 17 times the value of Under Armour. Nike has been the league leader in the sports apparel business for years, thanks to non-stop product innovation and exceptionally strong marketing. Much of that marketing prowess comes thanks to big-name endorsement deals that require substantial cash outlays. Shifts in the company's structure in recent years should help the company continue to perform in 2010.

Nike has re-focused itself on widening its footprint of late, eschewing value offerings like Starter and honing in on high-growth international names like Reebok and Umbro. Right now, Nike's growth story exists outside of U.S. borders. Emerging markets hold the key to expansion for this globally recognized brand. That expansion may come at the cost of margin points, though. As the company pushes into areas of lower disposable income, it'll need to trim its sale prices in kind.

Despite Nike's size, significant competitive risks lie on the horizon. With smaller, more-maneuverable rivals like Under Armour on the horizon, Nike will need to stay on top of its largely saturated U.S. business in order to keep its dominance.

>>>Also see: 5 Innovation Leaders Poised for Stock Gains

Largely unrivaled in its football business is video game maker

Electronic Arts

(ERTS)

. With the de facto football game franchise in

Madden NFL

, the company's EA Sports division has a consistent best-seller that delivers substantial recurring revenues thanks to its serial re-release each year.

Madden

is far from EA Sports' only officially-licensed best-seller. Partnerships with leagues like FIFA, and the NFL, NBA and PGA have made the company's sports games one of its most lucrative product offerings. But Electronic Arts has been struggling of late to continue some of that growth in recent years. A shift from big-ticket games cheaper arcade versions should spur some lower end growth.

But inasmuch as Electronic Arts has seen success in its Sports division, the company has faced languishing sales in other once-dominating franchises. As EA moves back toward fragile profitability, investors should be wary of downside on this stock.

>>>Also see: Top 10 Companies That Beat Sales Forecasts

Sirius XM Radio

(SIRI) - Get Sirius XM Holdings, Inc. Report

is another stock that's taken heat from shareholders for the last few years. The company, which delivers satellite-based radio content, has seen a nearly 70% rally in shares but still sits in penny stock territory. Uncomfortably thin margins have been the main reason for that, with the high-cost structure of the entertainment industry (and contracts for the NFL and talent such as Howard Stern ringing in at hundreds of millions of dollars).

But while the company's content has been expensive to acquire, it's done a good job of luring subscribers to the service. The company counted more than 19 million subscribers at the beginning of 2010. That subscriber growth has helped pull the company up to profitability for the last three consecutive quarters, a trend that battle-weary investors would like to see continue for the rest of the year.

With more bandwidth than terrestrial radio operators, Sirius XM is able to broadcast games to a national market -- a deal that helps cement the company's subscribers and keeps recurring subscription fees rolling in.

More on Sirius   Cult Stocks   7 Penny Stocks to Buy
 

To see these football stock plays in action, check out

the Fantasy Football Stock portfolio

on Stockpickr.

-- Written by Jonas Elmerraji in Baltimore.

RELATED LINKS:

>>5 Rocket Plays for September

>>Must-See Charts: BHP Billiton, Exxon

>>Stocks With High Short Interest

Follow Stockpickr on

Twitter

and become a fan on

Facebook.

At the time of publication, author had no positions in stocks mentioned.

Jonas Elmerraji is the editor and portfolio manager of the Rhino Stock Report, a free investment advisory that returned 15% in 2008. He is a contributor to numerous financial outlets, including Forbes and Investopedia, and has been featured in Investor's Business Daily, in Consumer's Digest and on MSNBC.com.