Hot Stocks To Buy Tomorrow: Manchester United (MANU) Headed for a Quick Rebound

Thu, Apr 3, 2014

Hot Stocks Companies In Manchester United

 

They’re not even the best team in Manchester right now!

That sums up the current position of Manchester United (MANU).

United’s neighbor, Manchester City FC, is in third place in the Barclays Premier League and they’re still better than might Manchester United.hot stocks to buy tomorrow

United rests in seventh place (out of 20 teams). It’s lowest place ever for United in the two decades of the Premier League.

That’s a huge problem for the team. But it’s a much bigger problem for United’s future revenues.

Or so, at least that’s what the market thinks right now.

Top Four or Bust

There are two reasons most Americans will never accept European soccer like they do other sports.

First, is the time difference. To watch games live, you may have to wake up as early as 5 AM on a Saturday or Sunday if your team is in the early games.

The other reason is it’s confusing.

The game’s not confusing. No hands. Put the ball in the net. You get that.

The confusing part is the number of competitions.

Consider a top-tier Premier League team. They are playing for four titles at the beginning of the year. There is the League Cup (currently sponsored by Capital One), the FA Cup, the Premier League itself, and the UEFA Champion’s League (and the Europa League if you get third in the group stage of the Champions League).

It’s totally confusing for most Americans. After all, there’s only one Super Bowl to decide it all.

But here’s the thing about those competitions, they all mean a lot of money for the team.

Consider this.

Just making it to the UEFA Champions League means at least $35 million in revenue to the team.

Doing well means even more money. Bayern Munich won the Champion’s League last year and collected $70 million in prize money.

If you don’t make it there, winning the Europa League can mean $9 million in prize money. That’s what Chelsea FC got in for winning this after getting eliminated from the Champions League in 2012-2013.

hot stocks to watch tomorrow

Manchester United, in seventh place in the Premier League, qualifies for none of the big money European competitions next year.

As a result, the market thinks Manchester United is going to potentially see its revenues decline by 10% or more next year.

That, however, is not likely to be the case from a contrarian investor’s perspective.

The Rebound Opportunity for Manchester United

Right now United shares are down 20% from their highs. The slide has been long and steady as United’s fortunes seemingly get worse and worse with each passing week.

According to odds makers, they are currently expected finish sixth. Tottenham are three and a half times more like to take the fifth spot which qualifies them for Europa League competition.

That’s a big hit financially. Aside from the $9 million or so in prize money, they also miss out on nine extra home games in the tournament. That’s about $27 million in additional ticket and concessions revenue.

In other words, it’s a big hit and justifies the current share price decline.

But here’s what the market is missing.

Manchester United will not likely miss out on much revenue as currently expected.

The team claims to have 650 million fans around the world. And that means they could set up a number of “friendly” competitions throughout the year since they won’t be involved in the European competitions.

These matches which would likely take place in the Middle East, Asia, and South America. United has passed on offers for these games before. But now they would be much more willing to play them because they have the time and each one game would bring in at least $2 million per game and possibly as much as $4 million.

If they wanted to get aggressive, they could book as many as five to eight additional games which could mean additional revenues as high as $25 million for the team.

That’s not nearly as much as they make playing in the big European competitions, but it would offset all the losses the market is pricing into Manchester United shares right now.

The Risk and Reward

In the end, contrarian investing comes down to managing risk and reward.

Manchester United, in currently their worst year in two decades, are hitting rock bottom.

Its stock price has fallen right along with the team and the reduced financial opportunities they will likely have access to next season as a result.

That’s great for contrarian investors because Manchester United is currently one of the most recognized sports franchises in the world, it has been valued as high as $3 billion (its current market cap is only $2.5 billion), and there are plenty of fans that will turn out wherever United plays.

They have had one bad year. And will likely have another off year as they rebuild next season.

Still though, Manchester United shares have taken a short-term hit due to short-term problems. As a result, it likely makes a great contrarian hot stock that could return 10% and as much as 30% (if they finish in fifth place and qualify for the Europa League).

That’s a good bet in a market where there aren’t too many good bets.

Good investing,

Andrew Mickey
Executive Editor, Contrarian Insights

 

Join Now

The Group of Big Investors in United States.

Your Email

hot stocks to buy tomorrow

Like This?

Share This:

Facebook Twitter Share on Google+ Digg Reddit LinkedIn Pinterest StumbleUpon

Recent Post

How to Buy Commodity Stocks Online 2015 - Learn here it’s Safe to Investment in Commodity Market

The how to invest in commodities stock 2015 can correct any fluctuations that investors may have felt recently in their fortunes. The beginning of the year was on a shaky note with the direction of profits not very clear. However, with the months wearing on, the commodities market is once..... Read More...

Is Gold and Silver a Good Investment in 2015? Gold Coins Investment Best Idea for a Great Return

The is investing in gold a good idea right now is the hot conversation for small and big time investors alike. With the crash in real estate markets and the continued disfavor of bonds, gold is the only option which is fast emerging as the fail safe investment. Moreover, gold..... Read More...

Top 10 Best Stocks To Invest In Right Now in 2015, Learn Here How to Buy Stock Now

The top ten best stocks to invest in 2015 can help investors consolidate gains this year with a great margin. These are the stocks one’s would prefer to buy and hold onto for a long time. There are more winners here than losers which sped way past the rest..... Read More...

Best Investment Strategy for High Income Earners, Learn Here Investment Strategies for Buying Stocks

The investment strategies for high income earners are a few of the best special financial tips to help in wealth management. The top 2-3 per cent of the high income earners has a challenging task in holding onto their money and investment may be the only way out to avoid..... Read More...

How to Make Money in the Stock Market with Little Money for beginners, Future Wealth

The how to make money in the stock market with little money is a sure fire way to get out a less than perfect existence. It is a means other catapult in to luxury almost overnight as has been shown by many an investor in all times. Investing in the..... Read More...