3 best sports stocks to buy in February
Our appetite for sports and other competitive experiences shows no signs of slowing down. We love to play. We love to watch people play. If you know how to invest, you can also profit from the wide world of sports.
DraftKings (NASDAQ: DKNG), fuboTV (NYSE: FUBO), and HUYA (NYSE: HUYA) are three sporting actions that are winning the game of the market these days. They are all showing strong double-digit growth and the outlook is bright for all three players. Play!
If you are not a fan of fantastic sports, chances are you will know someone who is willing to bet that you will eventually be. People love to cheer on teams and players, and fantastic sports add a new layer of fun to the experience.
DraftKings is rocking. Revenue jumped 42% on a pro forma basis in his last trimester, and he’s seen his players climb 64% in the past year to surpass one million. With its flagship fantasy sports platform and promising online sports betting business, DraftKings is, as they say on the baseball field, in the opening innings of this game.
The forecast for 2021 calls for a 34% to 57% increase in revenue. The most significant growth will occur in the first half of the year, when competitions are easy given the lack of sporting events during the first months of the pandemic, but the increases are still expected to impress in the second half of the year.
We cut the ropes, but a sports fan can’t live on it Ozark and The Mandalorian alone. Live TV streaming platforms are filling the void, and this is where fuboTV hopes to set itself apart from deep-pocketed rivals who are tech, media and telecommunications titans.
Most streaming platforms are pretty vanilla. The downside to fuboTV’s fishing line is that it is a “sport first” service with over three dozen sports channels. It also became the first platform to offer selected live events in 4K net. Another way fuboTV is set to stand out is to try and slip into DraftKings mode as it serves its rapidly growing audience of sports enthusiasts.
A pair of acquisitions over the past two months allows DraftKings to roll out a fantastic sports platform to its 545,000 subscribers by this summer. He plans to present a bookmaker by the end of the year. With fuboTV users already spending an average of four hours a day on the platform, it is well positioned to build up a lucrative third revenue stream (in addition to its healthy subscriptions and ad revenue).
Let’s end by turning to esports actions. Video games have always been a booming business, but the fan market watching some of the world’s best players in action is growing even faster. If you’re even a somewhat casual gaming fan, you’re probably familiar with Twitch, the popular streaming platform where players play in front of a live online audience.
HUYA is the Twitch of China, and that might not exactly do HUYA justice. There were 172.9 million average monthly Huya Live users at the end of the third quarter, 18% more than a year ago. Most of them are freeloaders, but HUYA is taking advantage of their improved ad monetization skills. Revenue growth has slowed markedly over the past five quarters, but there’s nothing wrong with a 24% gain in revenue when adjusted income grows more than three times faster.
The icing on the cake is that HUYA has agreed to merge with its closest competitor Douyu (NASDAQ: DOYU). The two would control 80% of the market. Some fear that regulators no arranged marriage, but that doesn’t mean potential investors might want to wait for clarification on this front. HUYA shares took a hit when it announced the acquisition of Douyu four months ago, and it is still trading lower at Tuesday’s close. The market could actually rally to HUYA if the deal collapses, but the goal here is the combined juggernaut that would command an audience of around 300 million game fans.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.