After another action-packed weekend in the NFL I decided to look at a couple of companies with exposure to the football season. To be clear when I refer to the ‘football season’ I exclusively look at the September through December period of any given year.
HIBB Sports Inc (HIBB) operates a chain of sporting goods stores serving the small to mid-size markets. In total the company has 837 stores in 26 states, and sports a market capitalization of $1.55billion. While the stock has rallied roughly 30% year to date it has mostly traded in a wide trading range since the month of May.
After looking at the seasonal tendencies of the company’s stock performance what intrigued me was the stellar rallies it has had in the September – December period over the past ten years. Except for 2007 and 2008 HIBB Sports Inc (HIBB) rallied between roughly 25% – 60% each September – December period since 2003. During the volatile autumns of 2007 and 2008 the stock performed poorly along with the rest of the market, which should not be surprising however given its cyclical nature and a beta of 1.10 versus the S&P 500.
On the chart below I marked the September – December period for each year all the way back to 2003. Green bars reflect positive performance for the stock, red marks negative performance. To be sure, the S&P 500 also has had a good tendency for rallies during that same period, ex 2007 and 2008. What stands out about HIBB Sports Inc (HIBB) however is the magnitude of its rallies during the last four months of the year despite a historically good correlation to the S&P 500 itself.
On the charts HIBB Sports Inc (HIBB) is currently wedged within two trading ranges. The larger one dating back to May spans from $53.50 to $63.40 and the smaller one $58 to $60.80. If history is any guidance and the broader market also manages to move higher through December, then this stock shouldn’t have too much difficulty breaking above the year to date high at $63.40.
Another stock that I find myself looking at during each football season is Buffalo Wild Wings Inc (BWLD). Each year football fans rush to these casual dining restaurants to get their fix of chicken wings and sports. The stock’s performance during the last four months of the year historically hasn’t been nearly as amazing as that of HIBB Sports Inc (HIBB), but on the charts Buffalo Wild Wings Inc (BWLD) currently sits at a crucial point.
The stock has repeatedly found resistance around the $89 mark since May. Just the other day, on October 5th the stock tried to push above the resistance level but failed to do so and left an ugly red bar on the charts. Given that by my count this is now the stock’s fifth attempt since May at piercing through $89 and currently displaying not very overbought momentum oscillators the stock should sooner rather than later blow past $89 on its way to new highs for the year. A buy signal does not occur until the stock has moved above $89.
