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Jorge Aura
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For over 10 years I have been involved with the financial world. I am currently an independent investor with amateur level.
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  • 2 Stocks Devoted To Fighting Sports 0 comments
    Oct 19, 2012 11:41 AM | about stocks: AVEW, WWE

    In the following article I am going to analyze two mass media companies that deal with wrestling. These companies were founded in the USA. Their clients are mostly young people. They organize sporting events and sell their image through merchandising products. Their future growth comes by expanding into new markets.
    Wrestling companies do not depend on the advertising industry as television networks. These companies grow by the entry into other countries and the mass organization of events. In my opinion, the risk of return on investment is moderate and the annual growth of benefits is very high.

    In the following table we will see the markets where they are positioned.

    CompanyMarketsPotential Expansion
    World Wrestling EntertainmentWorld20%
    UFC "Private Company"EEUU and Europe60% (Asia, Africa and Oceania)
    ActionView InternationalEEUU90% (Asia, Africa, Europe and Oceania)

    Next, I am going to examine two of the three companies mentioned above as they have shares available to future shareholders.

    World Wrestling Entertainment (NYSE:WWE) is an integrated media and entertainment company, principally engaged in the development, production and marketing of television and pay-per-view event programming and live events and the licensing and sale of consumer products featuring its brands. It has annual sales of $483 Millions. 52-week's range is from $7.44 to $10.80.

    Growth201120102009
    Revenues$483MM$477MM$475MM
    Net Income$24.83MM$53.45MM$50.30MM

    My Fundamental and Chart Analysis

    World Wrestling Entertainment has a market cap of $614.40 Million and an enterprise value of $445.23 Million. Its trailing P/E is 21.08, and its forward P/E is just 16.78. World Wrestling's estimated growth rate for this year is -53.27%.

    (click to enlarge)

    (Source)

    From a technical standpoint, this stock is currently trading below both its 50-day and 200-day moving averages, which is bearish. This stock plunged from its December, 2011 high of $10.80 to a recent low in June of $7.44. If you are bullish on this stock, I would look to be a buyer on the next high-volume move above some near-term overhead resistance at $8.4 a share. Look for volume that's tracking in close to or above its three-month average action of 164,250 shares.

    World Wrestling Entertainment's Risks

    The most important risks of World Wrestling Entertainment are a decrease on its revenues and a reduction of its global business. The company has a total cash position of $170.18 Million on its balance sheet, and its total debt is only at $1 Million.

    Actionview International (OTCPK:AVEW) engages in broadcasting live pay-per-view mixed martial arts events through the Internet. The company is owns the world championship of full contact (WCFC). It has annual sales of $92.968.
    52-week's range is from $0.0001 to $0.0051.

    Growth201020092008
    Revenues92.9685.50343.951
    Gross Profit(224.586)(281.167)(285.799)

    My Fundamental and Chart Analysis

    Actionview International has a market cap of $137,500 and an enterprise value of $47,880. Its trailing P/E is incalculable, and its forward P/E is just incalculable. Actionview International estimated growth rate for this year is -30%.

    (click to enlarge)

    (Source)

    From a technical standpoint, this stock is currently trading below both its 50-day and 200-day moving averages, which is bearish. This stock plunged from its December, 2011 high of $0.0051 to a recent low in March of $0.0001. If you are bullish on this stock, I would look to be a buyer on the next high-volume move above some near-term overhead resistance at $0.0002 a share. Look for volume that's tracking in close to or above its three-month average action of 3,346,984 shares.

    Actionview International's Risks

    The company's shares are quoted at $0.0001 since March 2012. It has no trading volume currently. The company has a total cash position of $4.39k on its balance sheet, and its total debt is at $52.28k. So Actionview will need cash on a near future. The most important risk is a possible reverse split.

    Conclusion
    This sector is ruled by three companies (WWE, AVEW and UFC Private company). This market is very limited. An economic recovery would multiply their incomes. In my opinion, a long-term speculative position could be taken at 3 years sight due to their expanding potential.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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