6 Gold Medal Stocks Set To Climb

By Tim Parker | August 08, 2012 AAA
6 Gold Medal Stocks Set To Climb

There's no doubt that the Olympics have an effect on the stock market. Since 1900, the Dow Jones Industrial Average has seen an average gain of 4% during the Olympic games with positive results 68% of the time. One strategy is to purchase an index ETF, but if you're looking for a more targeted approach, stocks that have direct ties to the Olympic Games may better fit your investing style. Not only are these names good for a possible Olympic bounce, they may be perfect for a longer-term spot in your portfolio.

SEE: True Value Of An Olympic Medal

Probably the most obvious choice is Nike. Bespoke Investment Group found that since 1984, Nike has seen an average gain of 7% during the games with positive results six out of the last seven years. Nike is down 15% from its May high of $114.40, leaving plenty of room for an Olympic bounce.

If you're going to watch the Olympics in the U.S., the only place to watch the games is on one of the NBC Networks. With more than $1 billion in advertising revenue, NBC hopes that its $1.18 billion dollar investment pays off, not only in advertising revenue, but through other revenue sources. Investors looking to play the media side of the Olympics can't buy NBC, but they can buy Comcast, the company that owns 51% of NBC Universal. Comcast has proven to be a strong momentum stock, up more than 22% since April. If the games prove to be a big ratings event, could that be the next catalyst for further upside?

SEE: 7 Companies With Big Advertising Budgets

General Electric
Who owns the other 49% of NBC? General Electric. A longtime favorite of investors, GE has seen gains of nearly 10% in the past six months, and with a healthy 3% dividend, it may be one to hold much longer than just the two weeks of the Olympics.

Want to see the largest McDonald's in the world? It's at this year's Olympic games. As a "Corporate Partner," McDonald's wanted to go big and it did. Staffed by 500 employees, this 32,200 square foot store seats 1,500 people, but it won't be there long. After the games the store will be dismantled and recycled. A cool store doesn't make the stock a good buy, but the fact that McDonald's has seen positive returns in four of the last six Olympics games may all the reason you need.

Another one of the corporate partners, Coke has seen the $50 million partner fee pay off in big ways. Also seeing positive stock returns in four of the last six Olympic Games, Coke has sponsored the Olympics since 1928, often investing big in advertising and outreach events. Some speculate that companies like Coca-Cola see the positive effects of their sponsorships after the games, so a buy and hold strategy may be appropriate for this name.

SEE: Where Are Advertisers Spending Their Money?

You know UPS as a delivery service but it has a much bigger job than just delivery at the Olympic Games. Tracking, management of equipment, and other "logistical services" are charged to UPS for both the Olympic and Paralympic Games. Although its stock plunged recently due to a disappointing second quarter, this may be a good buying opportunity for the investor who will wait for the stock to recover; the 3% dividend makes the wait a little more profitable.

The Bottom Line
Although the games are in the second half, you're not too late. Once the Olympics come to an end, traders looking for a short-term bounce in these names could take profits if the trades went in their favors, but many of these names are much more than a trade; they're gold medal companies that may deserve a long-term place in your portfolio.

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