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I happen to be a big New Orleans Saints fan. So after I recovered my voice following the Super Bowl, I started thinking about how many folks I’d seen around the country, and particularly in Louisiana and Mississippi, wearing Saints paraphernalia. So where were these folks buying their souvenir T-shirts and jerseys?

I found an article from a Mississippi newspaper noting that the local Hibbett Sports stores had been mobbed by Saints fans. I looked to see that Louisiana and Mississippi have a lot of Hibbett Sports stores, far more than Dick's Sporting Goods (DKS), for example. So that gave me an idea for a stock possibility. Will the Saints add a "halo" effect to Hibbett (HIBB) stock?

Hibbett Sports, which specializes in branded merchandise focused on team sports, operates sporting goods stores in small to mid-sized markets predominantly in the Southeast, Southwest, mid-Atlantic and lower Midwest. The company appears to have created a niche market for itself by strategically aligning its merchandise with regional/local sporting and community interests. That means local high school or college teams as well as powerhouses like the Saints or LSU Tigers, which have also been on a winning streak. This strategy may actually give the company a competitive edge in these markets over larger rivals, such as Dick's Sporting Goods and Big 5 Sporting Goods (BGFV).

Looking deeper, the company is in the midst of a brisk store expansion program. It plans to augment its network by 42 new stores and expand 18 to 20 of its high-performing stores this year. Furthermore, Hibbett management has already identified 350 potential locations for future stores and recently ramped up its distribution center to support over 1,200 stores -- from 1,000 stores earlier.

Hibbett has a healthy, debt-free balance sheet with cash and cash equivalents of $24.8 million at the end of fiscal 2010 third quarter, and that is coupled with full availability under its $80 million unsecured credit facilities. This should provide Hibbett the financial flexibility to drive future top-line expansion. What’s more, the company has a good track record of returning cash to shareholders in the form of regular share buybacks. The stock appears to be a little expensive right now, but I'm definitely adding it to my watch list.

Disclosure: No positions

Source: Hibbett Sports: Looking for a Halo Effect From the Saints