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On Monday, Judge Nelson delivered an 89-page ruling that backed the NFL players in their fight to stop NFL owners from locking out the players to force negotiations for a new collective bargaining agreement. The owners have already appealed to the appeals court for a stay. Hopefully this means there will be some movement that eventually will settle the latest labor dispute and we will enjoy a full season of NFL football.

However, what happens if this continues into the summer and we don’t have a full football season? More importantly, which stocks might be impacted if the football season is shortened or cancelled altogether?

Buffalo Wild Wings (NASDAQ:BWLD)

Does anyone ever eat wings without a game in front of them? I personally can’t imagine that scenario, and Sundays and Monday nights would be heavily impacted if there was no - or a delayed - NFL season. The company alluded to this in its last earnings report:

Buffalo Wild Wings also said that the labor dispute between NFL players and owners could pose a temporary challenge for its business. Sporting events lure guests to the bar-and-grill restaurant's chains -- where games can be viewed on large projection screens.

BWLD is already vulnerable to rising gas and energy prices. Although it was one of the few restaurants or retailers that did experience a significant decrease in food costs, as chicken wings fell 36% in the last quarter to $1.22/lb, chicken wing costs make up 20% of BWLD’s sales. Given inflation everywhere else in the food chain, this trend is unlikely to last long term and will undermine profit margins when it inevitably reverses.

BWLD is valued at 24 times this year’s projected earnings and 20 times next year’s consensus - pretty rich for a restaurant stock. Insiders have sold approximately 20% of their shares over the preceding six months. A prolonged NFL strike could significantly impact this stock in a negative way, in my opinion.

Electronic Arts (ERTS)

Think Timmy is going to want the latest version of Madden NFL Football for Christmas if there is no football by late October? Do you think you are going to get it for him even if he wants it? Me neither. The release of Madden football is a huge revenue driver for this company. Madden 2011 was the number 1 selling game in North America last August, which gives some idea on the popularity of this game series. The company is already dealing with significant revenue challenges and does not need another one.

In addition to the football strike, rising gas prices could really continue to impact this segment of consumer spending. The recent Sony (NYSE:SNE) PlayStation debacle will not help overall video game sales either. Selling at a rich 30 times this year’s projected earnings and approximately 23 times 2012’s consensus, this struggling company is already valuation challenged. I believe there are better opportunities in the gaming universe.

The COO of ERTS evidently agrees with me as he announced that he is leaving for social media gaming concern Zynga this week. ERTS does have a pristine balance sheet with almost $6/share in net cash.The stock is an “avoid” sans a strike and a "sell" if the NFL season is impacted. I believe Activision (NASDAQ:ATVI) is a better value here.

Under Armour (NYSE:UA)

Is there a company whose main product persona is more tied to the NFL brand? When you think of the NFL draft, which images flash in your head? I bet at least one is from a combine workout where prospects are put through their paces in the ultra sleek UA outfits. I highly doubt we will have a prolonged strike, as both players and owners have too much at stake. However, if there is one stock that is highly vulnerable to this possibility, UA would be my pick.

The company’s vulnerability to bad news was demonstrated yesterday by the over 10% selloff in UA’s stock after its earnings report (see conference call transcript here) provided transparency into its growing inventory problem. Under Armor sells at over 42 times this year’s projected earnings and 3.3 times revenues after yesterday’s selloff. It is already vulnerable to rising gas prices, and lost 55% of its value during the last gas spike of late 2007/1st half of 2008. Insiders have sold over 500,000 shares in last six months.

Source: 3 Overvalued Stocks Vulnerable to a Prolonged NFL Strike