Shares expert reveals potential football World Cup investments

Written by Ray Clancy

Tuesday, 15 June 2010 12:00

With the football World Cup well underway investors may take the soccer tournament as a chance to make investments, it is claimed.

Indeed, Nick Raynor, investment adviser at The Share Centre has created a top ten shares list related to the tournament that investors may wish to consider.

Top is JD Sports Fashion (JD) which has undergone a transformation of late as the group moves away from traditional sports retail sales and focuses on the fashion division. ‘JD looks to benefit from the World Cup as its themed clothing range helps to increase sales, especially if England have a good run,’ said Raynor.

Television channel ITV is one to watch. Figures released in early May did not live up to expectations and ITV will be looking to boost its advertising revenue during the World Cup. The broadcaster announced it expects to see 25% growth in advertising during the tournament as advertisers pour money back into the company. ITV is also hoping for a further uplift if England can progress into the quarter finals and beyond.

The last World Cup in 2006 made a significant difference to sales for Domino’s Pizza and this year’s is expected to do the same, boosting both sales and its share price. ‘Although the economy is improving people are still keeping their purse strings tight and Domino’s should continue to benefit from football fans choosing to stay at home to watch World Cup games,’ explained Raynor.

Supermarket giant Tesco is the official 2010 World Cup sponsoring supermarket and is therefore turning itself in to a one stop shop for all World Cup memorabilia, even selling replica shirts.

Brewer Marston’s will be looking to see a boost in profits over the summer months and management is hoping for an extra £250,000 in revenue for each England match. ‘The brewer is a higher risk recovery stock and one to keep an eye on as the World Cup is likely to help increase footfall and thus beverage sales,’ added Raynor.

Pharmaceuticals giant GlaxoSmithKline could see an increase in sales of it’s over the counter products, such as pain killers, as fans celebrate a little too hard during the tournament. The group will also be hoping its World Cup advertising campaign featuring England player, Steven Gerrard will make Lucozade the number one sports drink for the World Cup 2010.

Owner of Currys and Dixons, DSG international is likely to see an increase in the sales of televisions as football fans look for a digital upgrade to watch the World Cup. The World Cup is happening at a time when HD is becoming more popular and many may see the tournament as an excuse to upgrade, especially after the recent analogue switch off.

As with many sporting events, bookmakers will be expecting the World Cup to bring an increase in trading. ‘Around £500 million was gambled during the 2006 tournament and this year it is expected to be much higher, assuming England don’t win the tournament, creating big loses on bets by patriotic punters,’ Raynor said.

South African beer manufacturer SABMiller is expecting to see an increase in demand of a whopping 17.6 million pints during the World Cup. The world’s second largest brewer is working hard to promote its Castle brand as its fights to remain ahead of rival Heineken in the South African market.

International suppliers of temporary power generators, Aggreko is one company which has already benefited from the World Cup. The company won a £30 million contract to supply power, temperature control for broadcast, technical services and media facilities to all 10 World Cup venues. ‘Aggreko’s share price rocketed at the beginning of March, when it won the contract and we will be interested to see how this one plays out,’ he added.