Formula One: The Pinnacle Of Live Sports Investing

Dec. 23, 2020 5:37 AM ETFormula One Group (FWONK)3 Comments

Summary

  • FWONK has pulled back sharply from recent highs.
  • With the promise of a normal season in 2021, the stock should head higher.
  • I see ~25% upside potential by the end of next year.

Image source

Live sporting events haven’t exactly been winners in 2020. For obvious reasons, sports as we knew them prior to 2020 ceased to exist. Many sports were shut down entirely, forgoing play altogether. Some were played in limited capacities, and just about all of them were played with very little to no fans in the stands. It’s a far cry from what we knew before COVID-19 became an unpleasant addition to our vernacular.

Shares of companies that are leveraged to live sporting events were obviously crushed, and for good reason; nobody knew at the time whether or not they could survive the enormous macro headwinds being thrown at them. Some have coped better than others, with one example being Formula One (NASDAQ:FWONK).

FWONK fell by more than half in the space of a couple of weeks earlier this year as the season that was set to begin in March didn’t actually begin until the summer. Races were largely run without fans in 2020, and the ones that did have fans hosted just a tiny fraction of normal volume. Still, Formula One has shown enormous resilience, and I think with the new Concorde Agreement in place, which limits the amount of spending each team can do, the company is well-positioned for the next few years.

The stock is also trading down to what should be strong support after a recent pullback from its relative high. The $40 area was the spot where two prior rallies fizzled out, and then became gap support following the early-November jump to new relative highs. In short, I think now is the time to buy FWONK as the long-term fundamentals should be positive, and the stock has pulled back nicely into support.

First, a bit about how Formula One works

Formula One is often referred

This article was written by

Josh Arnold profile picture
22.11K Followers
Author of Timely Trader
Maximize your gains through live trading with alerts ahead of market trends

I've been covering financial markets for ten years, using a combination of technical and fundamental analysis to identify potential winners (and losers) early, particularly when it comes to growth stocks.

Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in FWONK over 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.

Recommended For You

Comments (3)

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.