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In this article, we discuss the 11 best sporting goods stocks to invest in. You can skip our detailed analysis of these stocks and the current market situation, and go directly to the 5 Best Sporting Goods Stocks To Invest In.
The billion-dollar sporting goods market encompasses various product categories, including athletic apparel, workout equipment, licensed sports products, and footwear. The sports & outdoor category is expected to generate $75.24 billion in sales in 2022, with China accounting for most of that amount, according to Statista. By 2025, the market volume is predicted to reach $100.80 billion, with revenue forecast to expand at a 10.24% annual rate (CAGR 2022-2025). The average revenue per user (ARPU) is expected to amount to $70.29 in the sports & outdoor category. Along with sports & outdoor category, the global sports apparel market is forecasted to reach around $249 billion in 2026. The global sports equipment market is also forecasted to reach a value of $191.62 billion by 2026. According to Mckinsey, despite rising health consciousness, shifting channel choices, and growing environmental concerns, the sporting-goods business is still evolving. The sporting-goods industry has managed to resume pre-COVID-19 levels of growth despite challenging economic conditions.
Some of the best sporting goods stocks to invest in right now include NIKE, Inc. (NYSE:NKE), Lululemon Athletica Inc. (NASDAQ:LULU), and Under Armour, Inc. (NYSE:UA), among others.
Our Methodology
We focused on sporting goods companies with solid business fundamentals and growth incentives for this list. The hedge fund sentiment around each stock was derived from Insider Monkey’s database, which tracks 895 hedge funds as of the second quarter of 2022.
Best Sporting Goods Stocks To Invest In
11. Big 5 Sporting Goods Corporation (NASDAQ:BGFV)
Number of Hedge Fund Holders as of Q2, 2022: 9
Big 5 Sporting Goods Corporation (NASDAQ:BGFV) is a California-based sporting goods company that operates 433 stores in 11 states. The company also provides athletic shoes, apparel, and sports-related accessories.
Big 5 Sporting Goods Corporation (NASDAQ:BGFV) currently pays a quarterly dividend of $0.25 per share. As of October 24, the stock’s dividend yield based on the trailing twelve months came in at 8.51% with a payout ratio of 35.59%.
At the end of Q2 2022, 9 hedge funds in Insider Monkey’s database owned stakes in Big 5 Sporting Goods Corporation (NASDAQ:BGFV), down from 12 in the previous quarter. The collective value of these stakes is over $9.8 million. Among these hedge funds, D E Shaw held the largest stake in the company, worth $2.3 million. Dmitry Balyasny's Balyasny Asset Management and Israel Englander's Millennium Management held 164,568 and 30,407 shares of Big 5 Sporting Goods Corporation (NASDAQ:BGFV) at the end of Q2.
10. On Holding AG (NYSE:ONON)
Number of Hedge Fund Holders as of Q2, 2022: 18
On Holding AG (NYSE:ONON) is a Zurich, Switzerland-based premium sports products company that sells athletic footwear and apparel. It includes tennis legend Roger Federer as one of its co-entrepreneurs. The company offered its shares to the general public for the first time in September 2021, through a U.S. IPO, raising $746 million.
The company has been able to grow its revenue consistently in the past couple of years, recording revenue growth of 64% on a year-over-year basis. Wall Street is bullish on On Holding AG (NYSE:ONON). On October 20, analyst Sam Poser at Williams Trading upgraded On Holding AG (NYSE:ONON) to Buy from Hold with a $20 price target. Also, on September 21, Exane BNP Paribas analyst Aubrey Tianello initiated coverage of On Holding AG (NYSE:ONON) with an Outperform rating.
According to Insider Monkey’s Q2 data, On Holding AG (NYSE:ONON) was found in the public stock portfolios of 18 hedge funds, with collective stakes in the company worth $419.7 million. Henry Ellenbogen's Durable Capital Partners is the leading shareholder of On Holding AG (NYSE:ONON) as of Q2, 2022, holding 7 million shares worth roughly $124 million.
09. Clarus Corporation (NASDAQ:CLAR)
Number of Hedge Fund Holders as of Q2, 2022: 18
Clarus Corporation (NASDAQ:CLAR) manufactures bullets and ammunition for military and sports target shooting. The company is based in Salt Lake City, Utah, the United States.
Clarus Corporation (NASDAQ:CLAR) has a fortress balance sheet with current assets of $250 million exceeding current liabilities of $69 million more than three times. Additionally, Clarus Corporation (NASDAQ:CLAR) has been actively pursuing acquisitions over the past several years, which has resulted in more than doubling its revenues from 2016 to 2021. This year, it anticipates growth in revenue of 25% and operating income of 27%. Clarus Corporation (NASDAQ:CLAR) also pays a $0.03 dividend for a 0.86% yield as of October 24.
On September 30, despite lowering his price target for Clarus Corporation (NASDAQ:CLAR) from $40 to $35, Jefferies analyst Randal Konik maintained a Buy rating on the stock.
Hedge fund sentiment around Clarus Corporation (NASDAQ:CLAR) has increased in the second quarter of 2022, with 18 hedge funds long the stock, compared to 17 in Q1 2022.
08. Columbia Sportswear Company (NASDAQ:COLM)
Number of Hedge Fund Holders as of Q2, 2022: 19
Columbia Sportswear Company (NASDAQ:COLM) is a Portland, Oregon-based manufacturer and distributor of footwear, outerwear, and sportswear. The operational history of Columbia Sportswear Company (NASDAQ:COLM) is noteworthy, with sales and profitability generally increasing favorably. Although the company expects this year to be relatively poor, shares are nevertheless appealing from a cash flow point of view. The company has kept a levered free cash flow of $352.1 million since December 2021.
Columbia Sportswear Company (NASDAQ:COLM) expects its net sales to grow at a three-year CAGR of 9% to 11%, compared to the midpoint of its 2022 financial outlook, reaching $4.5 billion to $4.7 billion in 2025. The operating margin is expected to expand to approximately 14% of net sales in 2025. Diluted earnings per share are expected to grow at a three-year CAGR of 12% to 15% compared to the midpoint of 2022, reaching $7.35 to $7.95 in 2025.
On September 27, Cowen analyst John Kernan raised his price target on Columbia Sportswear Company (NASDAQ:COLM) to $86 from $85 and kept an Outperform rating on the shares. At the end of the second quarter of 2022, 19 hedge funds in the database of Insider Monkey held stakes worth $135.8 million in Columbia Sportswear Company (NASDAQ:COLM), compared to 23 in the preceding quarter worth $217.34 million. Among the hedge funds being tracked by Insider Monkey, Ken Griffin's Citadel Investment Group is a leading shareholder in Columbia Sportswear Company (NASDAQ:COLM), with 602,741 shares worth more than $43 million.
07. Hibbett, Inc. (NASDAQ:HIBB)
Number of Hedge Fund Holders as of Q2, 2022: 19
Hibbett Sports, Inc. (NASDAQ:HIBB), based in Birmingham, Alabama, is a leading athletic-inspired fashion retailer with nearly 1,100 Hibbett and City Gear specialty stores, located in 35 states in the United States.
On August 26, Baird analyst Justin Kleber raised his price target on Hibbett, Inc. (NASDAQ:HIBB) to $70 from $65 and kept an Outperform rating on the shares. Experts believe that Hibbett, Inc. (NASDAQ:HIBB) stock is incredibly cheap on an absolute basis, with a PE ratio of 7.25 compared to the sector median of around 9.46. The company paid the shareholders a quarterly dividend of $0.25 on September 20, with the record on September 8. It has a dividend yield of 1.80% and a payout ratio of 13.02% as of October 24.
19 hedge funds out of 895 tracked by Insider Monkey held positions in Hibbett, Inc. (NASDAQ:HIBB) at the end of the second quarter. The combined value of these stakes stood at $91.35 million. Dmitry Balyasny's Balyasny Asset Management was the leading shareholder at the end of Q2, with 430,309 shares worth $18.8 million.
Just like NIKE, Inc. (NYSE:NKE), Lululemon Athletica Inc. (NASDAQ:LULU), and Under Armour, Inc. (NYSE:UA), Hibbett, Inc. (NASDAQ:HIBB) is one of the best sporting goods stock to invest in.
06. Vista Outdoor Inc. (NYSE:VSTO)
Number of Hedge Fund Holders as of Q2, 2022: 25
Vista Outdoor Inc. (NYSE:VSTO) is an American manufacturer and marketer of outdoor sports and recreation products. Vista Outdoor Inc. (NYSE:VSTO) sells more than 40 labels. The recent acquisition of Simms Fishing Products has added about $110 million in net sales, strengthening the company's top line. The company has a market capitalization of $1.50 billion with a P/E ratio of 2.99 as of October 24 compared to the sector median of 9.46. The stock, thus, is relatively cheap and is one of the best sporting goods stocks to invest in.
Analysts are positive about the prospects of Vista Outdoor Inc. (NYSE:VSTO). On September 20, Jefferies analyst Anna Glaessgen initiated coverage of Vista Outdoor Inc. (NYSE:VSTO) with a Hold rating and a $26 price target. B. Riley analyst Eric Wold, on September 19, reiterated a Buy rating on Vista Outdoor Inc. (NYSE:VSTO) with a $51 price target.
Out of the 895 hedge funds polled by Insider Monkey for their second quarter of 2022 holdings, 25 had invested in Vista Outdoor Inc. (NYSE:VSTO). Out of these, Jeffrey Gates’ Gates Capital Management is Vista Outdoor Inc. (NYSE:VSTO)’s largest investor. It owns 5.5 million shares that are worth $155 million.
Along with NIKE, Inc. (NYSE:NKE), Lululemon Athletica Inc. (NASDAQ:LULU), and Under Armour, Inc. (NYSE:UA), Vista Outdoor Inc. (NYSE:VSTO) is one of the best sporting goods stocks to invest in.
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Disclosure. None. 11 Best Sporting Goods Stocks To Invest In is originally published on Insider Monkey.
