In this article, we discuss the 10 best sporting goods stocks to invest in. You can skip our detailed analysis of these stocks and the current market situation, and go directly to 5 Best Sporting Goods Stocks To Invest In.
Although the COVID-19 pandemic continues to leave its mark on markets and businesses around the world, the sporting goods industry has managed to return to pre-COVID-19 levels of growth amid strenuous economic circumstances. While the sporting goods industry contracted in size during 2020, with the market capitalizations of big sports firms falling during the fiscal year, 2021 brought some much-needed recovery for the industry. Despite some uncertainty caused by new viral variants and retightened restrictions, the tailwinds witnessed in 2021 are expected to continue. Overall, the global sporting goods market is expected to grow 8% to 10% a year up to 2025, from €295 billion in 2021 to €395 billion in 2025, according to research by management consultancy McKinsey.
The sporting goods market, which includes a host of different product types, such as athletic footwear, exercise equipment, sports merchandise, and athletic apparel, is a billion-dollar industry. In the United States alone, sporting goods sales amount to approximately $45 billion each year, making it a key player in the industry, holding the lion’s share of the global market with more than 30%. With changing consumer trends, the sportswear sector continues to perform better than other apparel during the pandemic. According to a report, the global sports apparel market generated around $193 billion in revenue in 2021. These revenues are predicted to continue their ascent and are estimated to reach around $270 billion by 2028.
With the return of major sporting events and vaccine rollout, a sense of normalcy has returned that will benefit the sporting goods industry for the next 12 months. While the shifting trends that the sporting-goods industry experienced in 2021 are likely to become even more established in 2022, risks, as well as opportunities, equally abound in this environment. The most successful companies will be those that can adapt to newer trends as they emerge. The same can be said about investors looking to make a profit from the industry.
Given the changing market environment, investors would do well to pick their stocks carefully. To that end, it would also be wise to select stocks that have been known for their strong business fundamentals, resilience in the face of inflation, room for growth, and solid financial positions. Some of these stocks include Nike, Inc. (NYSE:NKE), DICK’S Sporting Goods, Inc. (NYSE:DKS), and Under Armour Inc. (NYSE:UA), among others listed below.
For this list, we focused on sporting goods companies with solid business fundamentals and growth incentives. We also took into account company financials, most recent quarterly results, and the analyst and sentiment around these stocks.
The hedge fund sentiment around each stock was derived from Insider Monkey’s database which tracks 924 hedge funds as of the fourth quarter of 2021.
Best Sporting Goods Stocks To Invest In
10. Big 5 Sporting Goods Corporation (NASDAQ:BGFV)
Number of Hedge Fund Holders: 14
Big 5 Sporting Goods Corporation (NASDAQ:BGFV) is a California-based sports retailer that was founded in 1955. The company is involved in the sales of sports, fitness, camping, hunting, and home recreation products. A notable player in the sporting goods sphere, Big 5 Sporting Goods Corporation (NASDAQ:BGFV) has consistently increased its dividend yield for 16 years.
In the fiscal year 2021, the net sales of Big 5 Sporting Goods Corporation (NASDAQ:BGFV) stood at $1.16 billion in the United States, an increase from the $1.04 billion in the previous year.
According to its Q1 2022 results that were published on May 3, Big 5 Sporting Goods Corporation (NASDAQ:BGFV) reported earnings per share of $0.41, exceeding estimates by $0.04. Additionally, the company’s revenue for the period stood at $241.98 million.
Among the hedge funds tracked by Insider Monkey, 14 funds were bullish on Big 5 Sporting Goods Corporation (NASDAQ:BGFV) at the end of Q4 2021, compared to 17 funds in the earlier quarter. Alok Agrawal’s Bloom Tree Partners is the leading shareholder of the company, with 568,068 shares worth $10.7 million.
Similar to Nike, Inc. (NYSE:NKE), DICK’S Sporting Goods, Inc. (NYSE:DKS), and Under Armour Inc (NYSE:UA), Big 5 Sporting Goods Corporation (NASDAQ:BGFV) is a decent stock that investors should look out for.
9. Clarus Corporation (NASDAQ:CLAR)
Number of Hedge Fund Holders: 14
Clarus Corporation (NASDAQ:CLAR), a Utah-based company, is a leading developer, manufacturer, and distributor of outdoor equipment and lifestyle products focused on the climb, ski, mountain, and sport markets. The company’s portfolio of brands includes Black Diamond, Sierra, Barnes, PIEPS, SKINourishment, and Rhino-Rack.
Based on the company’s earnings and outlook reports, Clarus Corporation (NASDAQ:CLAR) expects its fiscal year 2022 sales to grow approximately 25% to $470.0 million compared to the previous year. By segment, the company forecasts sales for Outdoor to increase to approximately $237.5 million, the Precision Sport segment to increase to roughly $112.5 million, and the Adventure segment to contribute about $120 million.
On May 11, DA Davidson analyst Linda Bolton Weiser lowered the price target on Clarus Corporation (NASDAQ:CLAR) to $31 from $42 but maintained a Buy rating on the shares. According to the analyst, the company’s Q1 results were “solid” with gross margin “up robustly” due to favorable mix, productivity, and “super fan” brand pricing power.
At the end of the fourth quarter of 2021, 14 hedge funds in the database of Insider Monkey held stakes worth $97.7 million in Clarus Corporation (NASDAQ:CLAR), compared to 16 funds in the preceding quarter, with holdings worth $83.56 million.
8. Acushnet Holdings Corp. (NYSE:GOLF)
Number of Hedge Fund Holders: 15
The parent company of the leading golf ball maker Titleist, Acushnet Holdings Corp. (NYSE: GOLF) is a Fairhaven-based corporation that is involved in the design, development, manufacture, and distribution of performance-driven golf products in the United States, Europe, the Middle East, Africa, Japan, Korea, and other countries.
Despite the recent growth the company has enjoyed, its financial performance in the first quarter of the fiscal year 2022 was somewhat mixed. Although its revenue rose by 4.3% from $580.9 million to $606.1 million, Acushnet Holdings Corp. (NYSE:GOLF) reported a decrease in its net income. On the other hand, the company expects sales to come in at between $2.175 billion and $2.225 billion, implying a revenue growth of between 3.8% and 6.1% on a year-over-year basis.
Earlier this April, JPMorgan analyst Kevin Heenan assumed coverage of Acushnet Holdings Corp. (NYSE:GOLF) with a Neutral rating and price target of $45, up from $30. The analyst sees the 2022 outlook for golf as balanced, with tailwinds from pricing, channel re-stock, and product innovation weighed against challenging comparisons and a broader economic reopening.
According to Insider Monkey’s database, Acushnet Holdings Corp. (NYSE:GOLF) was spotted on 15 investment portfolios by the end of the fourth quarter of 2021. The total stakes of these funds in the company amounted to approximately $37.55 million. As of December 31, D.E. Shaw is the largest stakeholder in Acushnet Holdings Corp. (NYSE:GOLF), with stakes valued at $11.7 million.
7. MarineMax, Inc. (NYSE:HZO)
Number of Hedge Fund Holders: 17
A leader in the recreational boat and yacht retail market, MarineMax, Inc. (NYSE:HZO) is a Florida-based company that sells new and used recreational boats, jet skis and water sports accessories, yachts, and related marine products and services, as well as provides yacht brokerage and charter services.
For the fiscal first quarter of 2022, MarineMax, Inc. (NYSE:HZO) announced that its quarterly revenues came in at $610.11 million, up 16.63% on a year-over-year basis, and outperformed the market by more than $68.77 million. The company also reported an EPS of $2.37, beating expert estimates by $0.59.
On April 26, DA Davidson analyst Brandon Rolle initiated coverage of MarineMax, Inc. (NYSE:HZO) with a Buy rating and a $48 price target. According to Rolle, the boating industry is in a much better position compared to other industries he covered, with strong demand and a lean inventory environment allowing MarineMax, Inc. (NYSE:HZO) to outperform investor expectations on both earnings and margins.
As of Q4 2021, 17 hedge funds in the database of Insider Monkey held stakes worth $92.37 million in MarineMax, Inc. (NYSE:HZO), the same as in the previous quarter worth $55.36 million. Of these, Arrowstreet Capital reported holding 482,544 shares worth roughly $28.49 million in MarineMax, Inc. (NYSE:HZO).
6. Hibbett Sports, Inc. (NASDAQ:HIBB)
Number of Hedge Fund Holders: 23
Hibbett Sports, Inc. (NASDAQ:HIBB), headquartered in Birmingham, Alabama, is a leading athletic-inspired fashion retailer with nearly 1,100 Hibbett and City Gear specialty stores, located in 35 states in the United States. In the fiscal year ended on January 29, 2022, net sales of Hibbett Sports, Inc. (NASDAQ:HIBB) amounted to around $1.69 billion, a considerable increase over last year’s $1.42 billion.
Earlier this March, Hibbett Sports, Inc. (NASDAQ:HIBB) reported that its earnings per share for the fiscal fourth quarter of 2021 were valued at $1.25, beating expert estimates by $0.03. Additionally, the company reportedly generated revenues amounting to $383.35 million for the quarter.
Among the hedge funds tracked by Insider Monkey, 23 were bullish on Hibbett Sports, Inc. (NASDAQ:HIBB) at the end of the fourth quarter of 2021, with aggregate positions worth $93.87 million. Israel Englander’s Millennium Management is one of the biggest stakeholders in the company, with 213,861 shares valued at $15.38 million.
Just like Nike, Inc. (NYSE:NKE), DICK’S Sporting Goods, Inc. (NYSE:DKS), and Under Armour Inc (NYSE:UAA), Hibbett Sports, Inc. (NASDAQ:HIBB) is a notable stock in the sporting goods industry.
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Disclosure: None. 10 Best Sporting Goods Stocks To Invest In is originally published on Insider Monkey.