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No sporting event attracts as much attention across the globe as the World Cup.
In fact, you could argue that no event period is more universally important across every time zone. Really, only the Olympics comes close.
Consider: 3.2 billion people watched at least a portion of the last World Cup – 46.4% of the world’s population. Nearly a billion people watched the final. Only the Opening Ceremony of the 2008 Summer Olympics in Beijing has attracted more worldwide viewers.
So when the 2014 World Cup kicks off this Thursday in Brazil, the world will undoubtedly be watching. And when the world is watching, somebody is profiting.
Among the companies that will profit greatly from this year’s World Cup, some will also make for good investments – at least in the short term.
Here are four “World Cup stocks” that stand out:
World Cup Stock #1: Nike (NYSE: NKE)
I wrote about this stock last week.
Nike derives $1.9 billion of its annual revenue from soccer. Together with its rival Adidas, the companies account for 70% of the global soccer market. Nike is also sponsoring 10 national teams, including the U.S. side and host Brazil, in this year’s World Cup – one more than Adidas.
While Nike’s soccer footprint is large, it’s still very much growing. The company didn’t even enter the soccer space until the 1994 World Cup was held on U.S. soil. Nike still has a ways to go before it overtakes Adidas as the No. 1 brand in soccer.
It’s catching up fast, though. Nike had its best quarter of the year during the 2010 World Cup. With even more viewers expected this year and Nike getting some significant pre-tournament buzz about its “Winner Stays” commercial, expect another monster World Cup quarter from Nike.
World Cup Stock #2 and #3: Coca-Cola (NYSE: KO) and McDonald’s (NYSE: MCD)
Two of the largest brand names on the planet will have a huge presence at this year’s World Cup.
McDonald’s is an official sponsor for the World Cup, so its name (and commercials) will be everywhere in the coming month. Coca-Cola is not only an official sponsor, but has a history of seeing a boost in local sales during the World Cup. Coca-Cola’s German sales jumped 15% during the 2006 World Cup in Germany.
Few companies have the global reach of these two behemoths. In an event that plays out in front of a worldwide audience, Coca-Cola and McDonald’s are two of just a handful of companies that shelled out big bucks to have their logos appear in every stadium and commercials air nonstop. Only a handful of companies in the world can buy that kind of publicity.
World Cup Stock #4: The Walt Disney Co. (NYSE: DIS)
Here in America, ABC and ESPN will air every game of the 2014 World Cup. And that will benefit those networks’ parent company, Disney.
Advertisers paid an average of $389,000 per 30-second TV spot during the 2010 World Cup, up from a mere $129,000 in 2006. That number should be even higher this year. And with ABC and ESPN airing 64 matches, all with countless commercials … well, that adds up over the course of a month. Even for a company as large and diversified as Disney, those kinds of sales move the needle. Analysts are expecting second-quarter earnings per share of $1.16, 15% higher than a year earlier.
Investors seem to already be snatching up Disney stock in anticipation of a big quarter. DIS shares have risen 6% in the last three weeks alone.
World Cup Stocks: The Bottom Line
It’s dangerous to invest in a company based on a single event. But companies that prove they can reach customers in an event as popular and globally visible as the World Cup are companies worthy of your attention.
There’s a reason you know the names Nike, McDonald’s, Coca-Cola and Disney. They’re all blue-chip companies and universally recognized brands. Anyone who watches soccer – and that’s at least 3.2 billion of you – will get to know those familiar names even more in the coming month.
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