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Who Takes Home the Gold in the Stock Olympics

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This past weekend introduced the world to the vibrant Brazilian city of Rio de Janeiro. The culture, the people and the landscape have been incredible to watch from afar and I’m sure amazing in person. The 2016 Olympics will bring some of the worlds most talented athletes from all over the world into the limelight. Yet, some viewers might not have ever seen some of these sports or heard of some of the countries participating.

Like the Olympics, the stock market is a place of the unknown for novice investors. There are so many different sectors and stocks to choose from which make markets overwhelming for many. Below I wanted to break down the stocks that are winning Gold, Silver and Bronze for investors, within their respective categories. Gold will be classified as Zacks Rank #1 (Strong Buy), silver as Zacks Rank #2 (Buy) and bronze as Zacks Rank #3 (Hold). Zacks Rank #4 (Sell) and #5 (Strong Sell) did not medal.

Companies Winning Gold

Archery & Shooting

In the Archery & Shooting events the gold goes to Smith & Wesson , a Zacks Rank #1 (Strong Buy). The company is one of the leading producers of quality handguns, law enforcement products and firearm safety products.

Smith & Wesson has a market cap of $1.6 Billion with a Forward PE of 16. The stock sports Zacks Style Scores of “A” in Growth and “B” in Value. The Massachusetts based company has over 1800 employees and has an expected 3-5 year EPS growth of 10%. 

The company is coming off a quarter where it beat EPS by 22.22%, shooting the stock almost 10% higher. Looking at the chart below, the company hasn’t missed on EPS in over four years, helping the stock surge over 900%.

Athletics

The Athletics arena is all about strength, speed, and of course shoes. The gold in this category goes to Adidas (ADDYY - Free Report) , another Zacks Rank #1 (Strong Buy). The German-based company has over 57,000 employees and isa leading brand in the sporting goods market with strong positions in footwear, apparel and hardware.

Adidas has a market cap of $32 Billion with a Forward PE of 32. The stock sports Zacks Style Scores of “F” in Growth and “D” in Value. However, the company has an expected 3-5 year EPS growth of 19% and pays a dividend of 0.79%.

The company just hurdled its expected EPS last quarter, beating to the upside by 90%.  The stock is up 100% over the last year and looking at estimates revisions for fiscal year 2016, there looks to be further upside. Over the last 30 days, estimates have been revised 9.4% higher for the year.

Under Armour (UA - Free Report) , a Zacks Rank #3 (Hold), received the bronze, while Nike (NKE - Free Report) , a Zacks Rank #4 (Sell), did not medal.

Equestrian

The Equestrian event is all about the horses and when I think horses I think Churchill Downs (CHDN). The company is a Zacks Rank #1 (Strong Buy) that isa racing company that primarily conducts wagering on live horse racing and simulcast signals of races.

Churchill Downs has a market cap of $2.3 Billion with a Forward PE of 25. The stock sports Zacks Style Scores of “A” in Growth and “C” in Value. The Louisville Kentucky based company has 4500 employees and has an expected 3-5 year EPS growth of 12%. 

The company reported Q2 earnings on August 2nd seeing $4.11 versus the $3.93 expected.  They delivered record net revenue and net income in Q2 after a 7th consecutive record-setting Kentucky Derby week. Looking at estimates for the current quarter, revisions have been hiked 6% from $0.83 to $0.88.

 

Companies Winning Silver

Boats (Canoe, Rowing, Sailing)

In the Boats category the silver goes to Marine Products (MPX - Free Report) , a Zacks Rank #2 (Buy). The company designs, manufactures and distributes premium-branded Chaparral sterndrive pleasure boats and Robalo outboard offshore fishing boats, and continues to diversify its product line through product innovation and strategic acquisition.

Marine has a market cap of $345 Million with a Forward PE of 18. The stock sports Zacks Style Scores of “A” in Growth and “C” in Value. The Atlanta, Georgia based company has over 750 employees and pays a dividend of 2.65%.

The company reported Q2 in late July seeing a penny miss, their first miss on EPS in six quarters. Looking to the rest of the year, estimates have been revised 8.7% higher over the last month, from $0.46 to $0.50.

Swimming

I know everyone is thinking Speedo here, right? Instead I am thinking maintenance for all those kids that will be in the pool impersonating Michael Phelps and Katie Ledecky.  I went with Pool Corp (POOL - Free Report) , a Zacks Rank #2 (Buy) that distributes swimming pool supplies and related products to swimming pool remodelers and builders, independent retail stores and swimming pool repair and service companies. 

Pool Corp has a market cap of 4.2 Billion with a Forward PE of 29. The stock sports Zacks Style Scores of “C” in Growth and “D” in Value due to its high PE. The Louisiana based company has 3800 employees and has an expected 3-5 year EPS growth of 15%. 

The company is coming off a 7 cent beat that it reported in late July. Pool also guided fiscal year higher now seeing a range of $3.25-3.40 verse the $3.29. Analysts have taken notice, raising estimates for fiscal year 2016 from $3.35 to $3.42 over the last 30 days, a 2% move.  

 

Wrestling

In Wrestling the silver goes to World Wrestling . I know its fake and the real Olympians would probably cringe, but the company is a Zacks Rank #2 (Buy). World Wrestling is an integrated media and entertainment company, principally engaged in the development, production and marketing of television programming, pay-per-view programming and live events.

The company has a market cap of $1.5 Billion with a Forward PE of 42. The stock sports Zacks Style Scores of “C” in Growth and “D” in Value because of the high PE. The Connecticut based company has over 800 employees and has an expected 3-5 year EPS growth of 20%. 

The company is coming off a quarter where missed EPS by 87.50% after three straight quarters of beats. However, subscriber and revenue growth remained on track so the stock held up and looks poised to test 52 week highs before the next earnings report in November. 

Gymnastics, Rackets, Volleyball, Golf and more!

When you think of the games and what kids might want to actually buy, you think sporting goods stores. The Olympics might generate an uptick in goods purchased in specialty sporting goods stores and sporting goods stores in general. The silver in this category goes to Big 5 Sporting (BGFV - Free Report) , a Zacks Rank #2 (Buy). The company isa leading sporting goods retailer in the western United States, operating stores over 4000 stores.

Big 5 has a market cap of 279 Million with a Forward PE of 23. The stock sports Zacks Style Scores of “A” in Momentum and “A” in Value. The California based company has 9,000 employees and has an expected 3-5 year EPS growth of 12%. 

The company reported Q2 on August 2nd with an 8 cent beat. This 266.67% beat was the sixth such beat over the last eight quarters.  Over the last 7 days, estimates for fiscal year 2016 have been revised 17% higher, from $0.46 to $0.54.

Cycling

Silver for Cycling went to Fox Factory (FOXF - Free Report) , a Zacks Rank #2 (Buy). The company is a designer, manufacturer and marketer of suspension products used primarily on mountain bikes, side-by-side vehicles, on-road vehicles, off-road vehicles, all-terrain vehicles, snowmobiles, specialty vehicles and applications and motorcycles.

Fox Factory has a market cap of 725 Million with a Forward PE of 17. The stock sports Zacks Style Score of “C” in Value. The California based company has over 15 employees and has an expected 3-5 year EPS growth of 15%. 

On August 2nd the company reported a 4 cent beat, or 14.29%. Investors rewarded the stock with a pop to post IPO highs, before pulling back a tad.

Coming in close behind for the bronze was Harley Davidson (HOG - Free Report) , a Zacks Rank #3 (Hold). The company reported Q2 with a slight beat sending the stock fractionally higher.

In Summary

Just like the Olympic athletes favored to medal, stocks sporting Zacks Rank #1(Strong Buy) or #2(Buy) are expected to outperform. Take time to enjoy the festivities that are the Olympics games, while you take time to adjust your portfolio with these top ranked stocks. If you want more picks on the Olympics games, check out my colleague Dave Bartosiak’s video and picks here.

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