3 March Madness Stocks To Consider As The NCAA's 'Big Dance' Kicks Off
Investing.com | Mar 17, 2021 17:07
The 2021 NCAA Men’s Basketball Tournament, also known as March Madness, or the Big Dance, is set to kick off this week. The college basketball extravaganza—a 67-game slate played over 19 days in Indiana—starts on Thursday, with the championship game to be played on Monday, Apr. 5.
Last year’s NCAA tournament was one of the first of several major sports-related events in the U.S. which were canceled due to the coronavirus pandemic. As such, the 2021 edition of March Madness could potentially be more popular than ever, given pent-up demand for the event.
In the spirit of March Madness, here are three stocks that are likely to be some of the standout winners as the Big Dance kicks off.
h2 1. DraftKings /h2This year’s March Madness tournament is expected to be the most wagered-on sporting event in history. According to projections from industry group PlayUSA, the 2021 NCAA tourney could generate anywhere between $1 billion and $1.5 billion in legal betting.
As opposed to other popular sports betting events like the Super Bowl or the World Cup final, the NCAA tournament benefits from having several games to wager on.
That should bode well for DraftKings, (NASDAQ:DKNG), whose stock has scored strong gains in recent months as Americans flocked to its sports-betting platform after more states legalized online sports gambling.
Shares of the Boston, Massachusetts-based sportsbook operator—public through a special purpose acquisition company (SPAC) as of April of last year—are up around 44% so far this year, compared to the S&P 500's 5.5% gain over the same timeframe.
DKNG stock closed at $67.14 on Tuesday after touching a record high of $74.07 late last week. At current levels, DraftKings has a valuation of $26.6 billion, making it the most valuable company in the sports betting industry.
With gambling on this year’s NCAA tourney expected to reach new peaks, DraftKings stock is well positioned to continue its march higher in the days and weeks ahead.
Honorable mentions: Penn National Gaming (NASDAQ:PENN), Flutter Entertainment (OTC:PDYPY), MGM Resorts (NYSE:MGM)
h2 2. Coca-Cola /h2As one of the three major sponsors of the NCAA tournament—along with AT&T (NYSE:T) and Capital One Financial (NYSE:COF)—the iconic Coca-Cola (NYSE:KO) brand is expected to be one of the main beneficiaries of this year’s March Madness event.
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Coca-Cola is an official NCAA ‘Corporate Champion’ partner, which means that their in-arena ads and television spots will appear regularly throughout the tourney.
That should bode well for the beverage giant’s mind-share, which directly correlates to the development of positive consumer awareness and popularity.
Not surprisingly, London-based Brand Finance, a brand evaluation company, recently ranked Coca-Cola as the strongest brand in the U.S., overtaking the top spot from Disney (NYSE:DIS) and beating out names like Apple (NASDAQ:AAPL), and Amazon (NASDAQ:AMZN).
It is also worth noting that Coca-Cola owns Powerade, the official sports drink of March Madness. As in previous years, Powerade is offering commemorative limited-edition 28-ounce bottles emblazoned with the numbers 0-99—giving consumers an option that connects with their own jersey number.
Shares of the Atlanta, Georgia-based soft drink giant have gotten off to a rough start in 2021, falling by almost 7% year-to-date, as the COVID-19 outbreak negatively impacted sales of Coca-Cola products around the world. KO stock settled at $51.22 yesterday, earning it a valuation of $223 billion.
Besides the potential tailwind from March Madness, Coca-Cola is also expected to get a lift as the pandemic recedes and more restaurants and leisure establishments begin to reopen in the coming weeks.
Honorable mentions: Domino’s Pizza (NYSE:DPZ), Yum! Brands (NYSE:YUM), Papa John's Pizza (NASDAQ:PZZA)
h2 3. ViacomCBS /h2Any discussion of March Madness stocks would be incomplete without ViacomCBS (NASDAQ:VIAC), the network which airs most of the tournament’s 67 nationally televised games, including the most-watched ones.
CBS—host of the NCAA Tournament since 1982—will televise the broadcast for both Final Four games scheduled for the last weekend of the Big Dance, as well as the National Championship game, which is expected to draw in around 15 million viewers.
As such, the media entertainment company has a lot to gain through ad-revenue during its March Madness coverage, which can at times command a fee of more than $1.5 million for a 30-second commercial spot.
ViacomCBS has gotten off to a tremendous start to the year, rallying about 158% so far in 2021, as investors piled into the name amid optimism surrounding its new streaming service, called Paramount+.
VIAC stock ended at $96.24 last night, just below its all-time high of $101.85 reached at the start of the week. The New York City-based media conglomerate has a market cap of $54.2 billion.
If this year’s NCAA tourney does in fact score unusually high viewership ratings, one of the biggest winners will be VIAC stock.
Honorable mentions: AT&T T, Fubotv (NYSE:FUBO)
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