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Big Dance is Back: 5 Stocks to Cash in on March Madness

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The most popular college basketball tournament, popularly known as March Madness, kicked off last week. It will be the first National Collegiate Athletic Association’s (NCAA) basketball event in two years. Last year, particularly, the major sports event, also known as Big Dance, was stalled by the coronavirus outbreak.

Nonetheless, this year’s March Madness is set to be all the more popular, thanks to the repressed demand for the big sporting occasion. The national sporting event will now grasp the psyche of Americans through April’s first week. In fact, it is now expected that this year’s March Madness may turn out to be the most gambled sporting extravaganza ever. This is because the sporting event is expected to witness an eye-popping total legal bet between $1 billion and $1.5 billion in the United States, per PlayUSA, as mentioned in a MarketWatch article.

In fact, as quoted in the MarketWatch article, lead analyst for PlayUSA.com, Dustin Gouker, said that “the Super Bowl draws the most bets for a single game, but March Madness and its 60+ games should more than double what the Super Bowl draws.” Lest we forget, the Supreme Court had introduced a law that helped several states to legalize sports betting and online gaming in 2018.

Additionally, the American Gaming Association (AGA), as mentioned in an investors.com article, projected citing a Morning Consult survey that around 18 million people will place their bets this time, up a staggering 206% from 5.8 million in 2019. By the way, AGA President and CEO Bill Miller, as quoted in a prnewswire.com article, said that “the sports betting landscape has changed dramatically since 2019 – and as a result, tournament betting has transformed.” He further added that “as consumers formerly limited to bracket contests now enjoy access to legal sportsbook options, they also plan to place traditional sports bets as March Madness returns.”

Therefore, gambling stocks at present might see the biggest win from the NCAA’s Big Dance. Notable among them is Penn National Gaming, Inc. (PENN - Free Report) . The company is one of the foremost, multi-jurisdictional owners of gaming facilities, with video gaming terminal operations. Its strong brand, partnership with Barstool Sports and an array of acquisitions are boosting its top line.

The company currently has a Zacks Rank #3 (Hold) and a Growth Score of A. The Zacks Consensus Estimate for its current-year earnings has moved 20.1% north over the past 60 days. The company’s expected earnings growth rate for the current and next quarter is 366.7% and 121.3%, respectively. You can see the complete list of today’s Zacks #1 Rank stocks here.

But why just gambling stocks? Major sponsors of March Madness are poised to gain from the millions of viewers the sporting event is expected to draw. Noteworthy among them are Capital One Financial Corporation (COF - Free Report) and The CocaCola Company (KO - Free Report) .

Presently, Capital One Financial has a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for its current-year earnings has risen 25.4% over the past 60 days. The company’s expected earnings growth rate for the current and next quarter is 224.5% and 301.2%, respectively. What’s more, the company’s expected earnings growth rate for the current year is nearly 138%. Similarly, the CocaCola Company has a Zacks Rank #3. The Zacks Consensus Estimate for its current-year earnings has climbed 1.4% over the past 60 days. Additionally, the company’s expected earnings growth rate for the current year is 8.7%.

Talking about viewership, the broadcasters of this sport-related phenomenon are set to benefit. Things are, therefore, looking up for media stalwart ViacomCBS Inc. as well as telecommunication behemoth AT&T Inc. (T - Free Report) . ViacomCBS is expected to broadcast the games at final stages, while many games will be shown on AT&T-owned channels like TBS, TNT, and truTV.

ViacomCBS currently has a Zacks Rank #3. The Zacks Consensus Estimate for its current-quarter earnings has moved up 12.8% over the past 60 days. The company’s expected earnings growth rate for the next five-year period is a solid 14%. Meanwhile, AT&T has a Zacks Rank #3 and its expected earnings growth rate for the next five-year period is 2.5%.

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