Four sports leisure stocks to acquire while Russian-made missiles continue to fire feature a U.S. motorcycle company, a sporting goods provider, a large health club operator and a wildlife entertainment business.
The four sports leisure stocks to acquire should benefit from renewed interest among people to venture out of their homes and resume many of the activities they enjoyed prior to the COVID-19 outbreak. However, the companies still need to surmount growing economic problems that include high inflation, continuing interest rate hikes by the U.S. Federal Reserve and recent layoffs, especially in the technology sector and financially struggling social media business such as Twitter Inc., which billionaire Elon Musk recently purchased.
Meanwhile, Russia’s ongoing invasion of Ukraine is creating a humanitarian crisis as temperatures drop below freezing in the capital of Kyiv and plunge even further in the countryside. The four sports leisure stocks to acquire are not as vulnerable to the conflict as many other companies that either do business in the area of the fighting or had operations they own disrupted by the continuing conflict.
In addition, Ukraine’s energy infrastructure has been decimated in many places and severely impaired by Russia’s attacks in many parts of the country. The situation deteriorated so badly that U.S. Secretary of State Antony Blinken recently announced $53 million in new aid to help restore Ukraine’s power grid.
Russia’s continuing attacks of neighboring Ukraine even led to the death of two Polish civilians on farms when Russian-made missiles hit their village roughly four miles, or 6.4 kilometers, west of the Ukrainian border on Tuesday afternoon, Nov. 15. The Russian missiles reportedly came from Ukraine while fending off Russia’s attacks or misfires and unintentionally reached Poland. Regardless of how missiles killed the two civilians in the NATO nation of Poland, they died because of Russia’s so-called “special military operation” that began on Feb. 24 and has killed more than 100,000 people on each side of Russia’s war against Ukraine, according to Mark Milley, Chairman of the U.S. Joint Chiefs of Staff. He further estimated Russia’s invasion caused 15 million to 30 million Ukrainian civilians to become refugees.
Four Sports Leisure Stocks to Acquire as Russian-made Missiles Still Relentlessly Fire
Harley-Davidson Inc. (NYSE: HOG), a Milwaukee, Wisconsin-based motorcycle manufacturer founded in 1903, is rated a ‘buy” with a $60 a share by BofA Global Research. The valuation is based on 11-12x the investment firm’s fiscal year 2023 earnings per share estimate of $5.15. Key reasons for the optimistic outlook include new rider interest, increased focus on per unit profitability with a goal of improving Harley-Davidson Motor Company (HDMC) margins to 2014-2015 levels and demographics shifting to a tailwind as the U.S. population of people aged 35-55 grow to add core customers for HOG U.S. retail sales.
Supply chain constraints have dramatically restrained new motorcycle sales, but total new and used motorcycle sales, according to IHS registration data, are up. BofA’s HOG full year 2022 new motorcycle sales forecast assumes worldwide shipments are more than 10% below 2019 levels. Due to HOG’s recent production shutdown, 10,000-12,000 shipments were impacted in 2Q 2022, but BofA predicted HOG should recapture lost production in the second half of the year.
Mark Skousen, PhD, has successfully recommended Harley-Davidson in the past through his Home Run Trader advisory service. The last time he did so, subscribers who followed his advice should have achieved a 12.64% gain in the stock and 144.44% in related call options.
Mark Skousen, Forecasts & Strategies chief and Ben Franklin scion, meets Paul Dykewicz.
Skousen, who also leads the Forecasts & Strategies investment newsletter, is a free-market economist who uses his knowledge of emerging trends to help him invest in sectors when they have favorable tailwinds. The recent share-price performance of Harley-Davidson shows the company’s prospects are on the rise.
Chart courtesy of www.stockcharts.com
Four Sports Leisure Stocks to Acquire: Demand Signals Stay Strong
Harley-Davidson recently reported third quarter 2022 earnings per share (EPS) of $1.78, compared to BofA’s estimates of $1.52, led by a 19% year-over-year increase in global shipments, which jumped 57,061 versus estimates of 56,469 as HOG recovered the “lion‘s share“ of volume from a second-quarter production shutdown. Motorcycle and related revenue increased 23.8%, and the financial services earnings before interest and taxes (EBIT) margin reached 38.3%.
Michelle Connell, a former portfolio manager who leads Portia Capital Management, of Dallas, Texas, spoke favorably about the outlook for Harley-Davidson, which no other motorcycle brand exceeds in reputation and prestige. Ownership of a Harley motorcycle is seen as an entrance into an elite club of members seeking adventures, she added.
Those purchases play into the theme that consumers are seeking experiences when buying the products, Connell continued. They aren’t simply motivated by purchasing “things,” Connell counseled.
Concerns of Harley-Davidson losing relevance with baby boomers is not valid, Connell opined. The company has established programs that help their motorcycles appeal to younger riders, including females, she added.
Michelle Connell heads Portia Capital Management, of Dallas, Texas.
“Harley-Davidson is starting to reap the rewards of the five-year plan that it announced in May 2020,” Connell conveyed to me. “This plan is three-plunged in approach: expansion of the Harley-Davidson brand into new markets and buyers, as well as products; improve profitability; and introduce electric motorcycles.”
Due to its solid brand recognition, five-year corporate plan and its compelling and attractive financial metrics, Connell said the stock has a place in a long-term investor’s portfolio that needs consumer discretionary names. But on weakness, she recommended, to capture potential upside of 20-25% by the end of 2023.
Four Sports Leisure Stocks to Acquire: Dick’s Sporting Goods (DKS)
Pittsburgh-based Dick’s Sporting Goods (NYSE: DKS) is the largest sporting goods company in the United States and offers differentiated product lines and elevated private label assortment, according to BofA. The investment firm gave the stock a $140 price objective and a “buy” rating. The company continues to benefit from the shift to solitary leisure activities, as well as improving demand for the footwear it sells.
Downside risks to meet that price objective are a weakening of the macro environment and rising gas prices, as well as potential secular headwinds in the golf category, weakened customer traffic trends, higher-than-expected cost pressures and the risk of a more competitive pricing environment. The company’s stock has surged since the summer but has further room to rise, BofA assessed.
Connell said she likes Dick’s Sporting Goods but prefers Harley-Davidson for the reasons she provided. Dick’s Sporting Goods sells virtually every imaginable athletic product and is where I bought my last softball glove.
Chart courtesy of www.stockcharts.com
Four Sports Leisure Stocks to Acquire: Planet Fitness Positioned as Health Club Leader
Planet Fitness (NYSE: PLNT), of Hampton, New Hampshire, is one of the world’s largest health club companies. BofA ranked it as the top-positioned fitness company in a recession. Key reasons include club use exceeding 2019 levels for clubs opened since 2017, according to foot traffic data. Plus, membership sign-ups should follow as fitness club members likely return to pre-pandemic levels by the end of 2022 or early 2023, BofA forecast.
Jim Woods, who leads the Bullseye Stock Trader advisory service and the Successful Investing newsletter, is a weightlifter and fitness buff who previously recommended Planet Fitness. Subscribers to his Bullseye Stock Trader service who followed his guidance could have notched returns of 23.54% in the stock and 100.76% gain in the related call options he chose.
Paul Dykewicz, head of Bullseye Stock Trader meets with Jim Woods in Washington, D.C.
Downside risks to BofA’s price target are near-term headwinds related to club closures caused by COVID-19, the competitiveness of the fitness industry, execution risks related to club growth, risks associated with its franchise model and high financial leverage, according to BofA. Other challenges are macroeconomic concerns that could hurt membership growth, same-store sales growth largely dependent on expanding its membership base, heavy reliance on one major vendor for equipment and mergers and acquisition risk, the investment firm added.
Chart courtesy of www.stockcharts.com
With COVID becoming less of a problem than during the past couple of years, fitness aficionados like me may be tempted to consider joining health clubs again. I canceled my previous membership with a relatively upscale club that provided a towel service and that tried to keep its fitness equipment modern and clean.
However, other members and I noticed the condition of the clubs in that regional chain deteriorating. Those who became my friends as we worked out about the same time in the evening talked about canceling our memberships or changing clubs. We likely were not alone, especially when COVID struck with a vengeance.
William Blair’s Sharon Zackfia, CFA, an analyst who covers lifestyle and leisure brands, also recommends the stock to outperform the market.
Four Sports Leisure Stocks to Acquire: Skousen Does Backflips for SeaWorld
Another stock that Skousen likes is SeaWorld Entertainment (NYSE: SEAS), of Orlando, Florida. The theme park and entertainment company is a key beneficiary of the post-pandemic economy, he added.
The company’s revenue hit $1.7 billion over the last 12 months, while third-quarter earnings jumped 32% on an 8.4% increase in sales, Skousen cited. Shares of SeaWorld further have soared nearly 300% over the past five years, despite the pandemic. With U.S. lockdowns over and consumers choosing to spend more on experiential services, the outlook for SeaWorld is exceptional, Skousen wrote to his Home Run Trader advisory service subscribers.
Chart courtesy of www.stockcharts.com
Treasurer and Chief Financial Officer Michelle Adams recently purchased 39,000 shares at $51.03, an investment of nearly $2 million. She now owns more than 75,000 shares.
In addition, Chief Commercial Officer Christopher Finazzo purchased 8,950 shares a couple weeks later. He owns over 72,000 shares.
These are two savvy insiders, Skousen wrote to his Home Run Trader advisory service reader. He advised his subscribers to own the stock, too.
Plus, Skousen’s daughter Hayley, a professional figure skater, is performing in a principal role in the SeaWorld Christmas show in Orlando, Florida. The following link shows her doing a backflip. Her husband, Pablo, also works with her at SeaWorld as a musician.
The company’s recognized brands include SeaWorld, Busch Gardens and Sea Rescue. The latter entity rescues and rehabilitates marine animals that are ill, injured or abandoned, with the goal of returning them to the wild.
China’s COVID-19 Lockdown Protests Intensify
China’s security apparatus moved quickly to quash mass protests that followed strict lockdowns as cases of COVID-19 swept the country during the past week. Police patrolled streets, checked cell phones and called some demonstrators to warn them against continuing their civil unrest. That response has reduced protests about the country’s zero-COVID policy that is slowing economic growth and had led many people to publicly oppose the controversial zero-COVID policy of Chinese leader Xi Jinping.
Cases in the United States totaled 98,676,688 and deaths reached 1,079,888, as of Nov. 30. America has the dreaded distinction of amassing the most COVID-19 cases and deaths of any nation. Worldwide COVID-19 deaths totaled 6,633,364, as of Nov. 30, according to Johns Hopkins University. Global COVID-19 cases reached 642,731,461.
Roughly 80.7% of the U.S. population, or 267,804,921 people, have received at least one dose of a COVID-19 vaccine, as of Nov. 24, the CDC reported. People who obtained the primary COVID-19 doses totaled 228,390,445 of the U.S. population, or 68.8%, according to the CDC. The United States also has given a bivalent COVID-19 booster to 36,001,216 people who are age 18 and up, accounting for 13.9% of the U.S. population in that age group.
Despite Russia’s leaders calling their country’s attacks against Ukraine that began on Feb. 24 a “special military operation,” firing into Ukraine unrelentingly and recently causing the death of two Polish civilians, good investment opportunities exist. The four sports leisure stocks to acquire highlighted in this column give investors a way to navigate risk and pursue reasonable returns amid growing economic risks.
Paul Dykewicz, www.pauldykewicz.com, is an accomplished, award-winning journalist who has written for Dow Jones, the Wall Street Journal, Investor’s Business Daily, USA Today, the Journal of Commerce, Seeking Alpha, Guru Focus and other publications and websites. Paul, who can be followed on Twitter @PaulDykewicz, is the editor of StockInvestor.com and DividendInvestor.com, a writer for both websites and a columnist. He further is editorial director of Eagle Financial Publications in Washington, D.C., where he edits monthly investment newsletters, time-sensitive trading alerts, free e-letters and other investment reports. Paul previously served as business editor of Baltimore’s Daily Record newspaper. Special Holiday Offer: Paul is the author of an inspirational book, “Holy Smokes! Golden Guidance from Notre Dame’s Championship Chaplain,” with a foreword by former national championship-winning football coach Lou Holtz. The book is great holiday gift and is endorsed by Joe Montana, Joe Theismann, Ara Parseghian, “Rocket” Ismail, Reggie Brooks, Dick Vitale and many others. Call 202-677-4457 for special pricing on multiple-book purchases.