For fans of the world’s most popular sport, this could be the time to inject your portfolio with stocks that are set to rise when the first whistle blows…
Every four years, the Fédération Internationale de Football Association (FIFA) is tasked with putting on the world’s most watched sporting spectacle: The World Cup.
Bigger than both the Summer Olympics and the Super Bowl, the World Cup is a tournament that is as much about making money as it is about the love of soccer.
And it’s for that reason that legions of companies pony up hundreds of millions of dollars or more to try and align themselves with the revered event.
Even if businesses don’t become official sponsors of the World Cup, big money is still being spent on advertising and promotions leading up to and during the month-long tournament which runs from June 12 to July 13.
Companies that operate in Brazil are sparing no expenses to be right in the heart of the action. And those that haven’t already done so are jumping on the soccer bandwagon very quickly because this could be the mother of all jackpots for Brazil.
Goldman Sachs recently unveiled their tournament predictions as they’ve done since 1998. Though Goldman has not accurately chosen a winner to date, this year’s odds on favorite to take it all is Brazil. Take a look at their analysis here:
Likelihood of Teams Progressing Through The World Cup
With nearly 50% probability, Brazil’s home turf advantage is seen as a major leg up over second place rival Argentina, whom Goldman gave just a 14.1% chance of winning. Germany, Spain, and the Netherlands round out 3, 4, and 5.
So with Brazil heavily favored to win it all, how can investors position themselves to take advantage?
Best Stocks To Buy Today:
If you’re siding with Goldman’s tea leaves this year, then you may want to take a good look at the Brazilian stock market.
In Goldman’s World Cup report, the bank sees “a clear pattern of outperformance by the winning team in the weeks after the World Cup final. On average, the victor outperforms the global market by 3.5% in the first month.”
Should history repeat itself, then one way to play the Brazilian Bovespa stock index is with the Emerging Global Shares Brazil Infrastructure ETF (NYSEARCA:BRXX).
Thus far, BRXX has outperformed all other Brazilian-related ETFs, as it provides strong exposure to Brazil’s construction industry that has been working over-time ever since the country won the World Cup bid for 2014.
With mere days before the first kick-off, the completion of venues continues to be plagued by delays, corruption, and cost overruns.
Nonetheless, construction companies will still be paid a massive chunk of the record $3.6 billion that the country is doling out to build or remodel 12 stadiums.
Betting On The Host’s Sponsors:
As with most big sporting events, major consumer brands like to splurge on teams they believe will have the longest run in the tournament, and therefore give these sponsors the most airtime.
Naturally, there’s no shortage of businesses wanting to cloak Team Brazil with their logos. But money talks, so here are the team’s top 3 corporate sponsors.
Nike Inc. (NYSE:NKE)
Nike designs, manufactures, and sells a variety of footwear, apparel, and sporting equipment for men, women, and children.
Nike branded jerseys will be worn by a number of countries in the tournament, but Brazil being the host city will be the one most likely to get the lion’s share of the visibility, regardless if they win the tournament.
Mastercard Inc. (NYSE:MA)
Mastercard offers electronic payment processing and transaction services to consumers, financial institutions, and businesses worldwide.
Although a contractual dispute ended Mastercard’s 16-year run as the official credit card sponsor of the World Cup after 2006, it’s still a major sponsor for Team Brazil. If Brazil manages to win it all, Mastercard’s ROI could easily trump what rival Visa gets to be the FIFA sponsor.
BRF SA (NYSE:BRFS)
Brazil Foods produces and sells poultry, pork, beef cuts, milk, dairy products, and processed food products throughout Brazil and around the world.
With a market cap of nearly $15 billion, BRFS is one of the largest food providers in the country and has major contracts locked up with many Brazilian supermarket chains. While having mostly domestic exposure, Brazil’s population will swell by a further 600,000 foreign tourists come June 12th, which should give a nice boost to BRFS’ revenues.
Betting On The Bettors:
William Hill plc (LON:WMH)
William Hill is a UK-based gambling and sportsbook company, providing fixed odds betting for a variety of sports and sporting matches.
Much like Goldman Sachs, oddsmakers at William Hill are leaning towards Brazil as the team most likely to hoist FIFA’s Jules Rimet Trophy at 3/1 odds. Argentina is second at 9/2, with Germany next at 11/2 and Spain’s 7/1 rounding out the top four. Once again, England is another long shot at 33/1, but regardless of how any of the teams do this year, soccer-mad fans will be lining the pockets of William Hill investors.