In this article, we discuss the 5 best sporting goods stocks to invest in. If you want to see more stocks in this selection as well as get some insight into the market, click 10 Best Sporting Goods Stocks To Invest In.
5. Vista Outdoor Inc. (NYSE:VSTO)
Number Of Hedge Fund Holders: 25
Vista Outdoor Inc. (NYSE:VSTO) is an American designer, manufacturer, and marketer of outdoor sports and recreation products that operates in two markets: shooting sports and outdoor products. The company has performed tremendously in fiscal 2022, delivering 37% revenue gains and outstanding margin expansion to each of its segments.
According to the company’s earnings report, Vista Outdoor Inc. (NYSE:VSTO) reached a record $809 million in sales in Q4 2022, a 36% increase over Q4 2021. Of these, $464 million came from the sporting goods segment, which was driven by an overall strong demand and increased volume sold after the Remington acquisition. On the other hand, the outdoor product segment generated $364 million, led by a growth in action sports and outdoor accessories.
At the end of the fourth quarter of 2021, 25 hedge funds in the database of Insider Monkey held stakes worth $460 million in Vista Outdoor Inc. (NYSE:VSTO), compared to 23 in the preceding quarter worth $407 million. Of these, New York-based investment firm Gates Capital Management is a leading shareholder in Vista Outdoor Inc. (NYSE:VSTO) with 5.3 million shares worth more than $246 million.
In its Q2 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Vista Outdoor Inc. (NYSE:VSTO) was one of them. Here is what the fund said:
“Our Strategy outperformed with strong results from consumer discretionary stocks like Vista Outdoor Inc. (NYSE:VSTO). Vista Outdoor Inc. (NYSE:VSTO), a manufacturer of a wide range of products serving the outdoor sports and recreation markets, also performed well in the period on continued demand and growing margins.”
4. Callaway Golf Company (NYSE:ELY)
Number Of Hedge Fund Holders: 34
Callaway Golf Company (NYSE:ELY) is an American global sports equipment manufacturing company that designs, manufactures, markets, and sells golf equipment. The company’s shares rose 7% in after-hours trading as the company raised its financial projections for the year on May 10.
Callaway Golf Company (NYSE:ELY) reported better-than-expected results for Q1 2022 on May 10. The golf company reported revenue and adjusted earnings per share of $1.04 billion and $3.36, respectively, while surpassing market estimates by $16.26 million and $0.12.
On May 12, KeyBanc analyst Brett Andress lowered the price target on Callaway Golf Company (NYSE:ELY) to $30 from $40 and maintained an Overweight rating on the shares. While the strong revenue metrics were already telegraphed at the investor day, the analyst was surprised by the upside in profitability despite near-term supply and inflation challenges. Additionally, the analyst believes the golf industry setup to be relatively resilient and continues to see meaningful earnings power.
34 hedge funds were bullish on Callaway Golf Company’s (NYSE:ELY) at the end of the fourth quarter of 2021, down from 38 funds in the third quarter of 2021. However, the stakes held in the company amounted to $469.62 million at the end of Q4 2021, up from $443.86 million for Q3 2021. Among the hedge funds being tracked by Insider Monkey, Ken Fisher’s Fisher Asset Management is one of the biggest shareholders in Callaway Golf Company (NYSE:ELY) with 3.17 million shares worth more than $87.1 million.
3. DICK’S Sporting Goods, Inc. (NYSE:DKS)
Number Of Hedge Fund Holders: 37
DICK’S Sporting Goods, Inc. (NYSE:DKS) is a Pennsylvania-based company that was incorporated in 1948. The sporting goods retailer offers sporting apparel and accessories, fitness equipment, golf equipment, and hunting and fishing gear products across the United States.
Earlier this May, DICK’S Sporting Goods, Inc. (NYSE:DKS) reported record earnings for its fiscal 2021 fourth quarter ended Jan. 29, 2022, as well as for the fiscal year 2021. The sporting goods retailer reported its Q4 sales reaching $3.35 billion, up 7.3% from the year-ago period, marking the largest sales quarter in the company’s history. It also reported $12.29 billion in net sales for the fiscal year, up 28.3% on a year-over-year basis.
In the fourth quarter of 2021, 37 hedge funds reported owning stakes in DICK’S Sporting Goods, Inc. (NYSE:DKS) according to Insider Monkey’s records, collectively worth approximately $1.3 billion. Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital held a prominent position in the company, with 1.6 million shares valued at $191 million.
2. Under Armour Inc (NYSE:UA)
Number Of Hedge Fund Holders: 53
Under Armour Inc (NYSE:UA) is a Maryland-based firm that operates as a leading inventor, marketer, and distributor of sports and performance apparel, as well as footwear and sports equipment. The company’s revenue for the fiscal first quarter of 2022 stood at $1.3 billion, a 3.48% increase from the previous quarter.
Despite a rocky Q1, Baird analyst Jonathan Komp is sticking with an Outperform rating and a $15 price target on the shares of the company. The analyst believes that sentiment could improve once Under Armour Inc (NYSE:UA) moves past its fiscal first quarter pressures and reinforces longer-term potential for the company to return to healthy growth rates.
1. NIKE, Inc. (NYSE:NKE)
Number Of Hedge Fund Holders: 68
Arguably the most famous sports-associated brand in the world, Nike, Inc. (NYSE:NKE) is an American multinational corporation that is engaged in the design, development, manufacturing, and worldwide marketing and sales of athletic footwear, apparel, equipment, accessories, and services.
Earlier this April, JPMorgan analyst Matthew Boss reiterated an Overweight rating on Nike, Inc. (NYSE:NKE) with a $164 price target after the company announced that China would be on pace to deliver “sequential improvement” in the fourth quarter, despite the impact of COVID-related restrictions on the local consumer market.
Nike, Inc. (NYSE:NKE) is a favorite among elite hedge funds, making it a decent choice for anyone wishing to diversify their portfolio. Among the hedge funds being tracked by Insider Monkey, London-based investment firm Fundsmith LLP is a leading shareholder in NIKE, Inc. (NYSE:NKE) with 8.7 million shares worth more than $1.4 billion. Overall, 68 hedge funds were bullish on the stock by the end of December 2021.
In its Q4 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and NIKE, Inc. (NYSE:NKE) was one of them. Here is what the fund said:
“NIKE, Inc. (NYSE:NKE) is another play on e-commerce as well as the anticipated growth in consumer spending as we learn to live with COVID-19. After selling out of the stock in 2016 due to competitive concerns, we were motivated to repurchase shares because of optimism around a new management team’s focus on accelerating Nike’s shift toward e-commerce and direct-to-consumer (DTC) distribution. Near-term supply chain issues in Vietnam and retail weakness in China that we see as ephemeral provided a good buying opportunity. We do not believe the market is giving proper credit to Nike’s potential to deliver attractive, high-single-digit revenue growth while delivering operating margin expansion as more merchandise is sold direct. NIKE, Inc. (NYSE:NKE) is also still underindexed to the women’s category, which we see as a significant ongoing catalyst.”
