This Publicly Traded MLB Team Is Crushing It on the Field — and in the Market
Here's a way to benefit from the skyrocketing value of Major League Baseball teams.
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The Atlanta Braves are outperforming the broader market.
One month into the Major League Baseball season, the Atlanta Braves have the second-best record in baseball. The Braves have won 16 of 23 games, and are just a half-game behind the Los Angeles Dodgers for the best record in the sport.
If the Atlanta Braves were a stock, they’d be hitting a 52-week high right now.
Put Me In, Coach
Actually, you can buy shares in the Atlanta Braves, and those shares did close at a 52-week high on Tuesday. Shares of Atlanta Braves Holdings (BATRA) have traded on the Nasdaq for the past 10 years.
On Opening Day, Atlanta Braves Holdings tagged its 50-day moving average (blue arrow). Since then, the stock has climbed by over 16% in under a month.
In the process, Atlanta Braves Holdings broke out of a cup-and-handle pattern (shaded yellow) that formed over the previous nine months. Since that breakout, the stock is moving higher on heavy volume (shaded blue), an indication that institutional money may be the driving force behind this move.
Based on that bullish formation, and taking into consideration the strong volume since the breakout from that pattern, I’m giving Atlanta Braves Holdings a price target of $65.
Here’s Why Atlanta Braves Shares Are Rising
Shares of Atlanta Braves Holdings are climbing because the valuations of all Major League Baseball teams are on the rise.
For example, the highest price ever paid for an MLB team is $2.4 billion. That’s the price hedge fund maven Steve Cohen paid for the New York Mets in 2020.
Now, just six years later, another team, the San Diego Padres, has just changed hands.
The price? $3.9 billion. That’s 62.5% more than Cohen paid for the Mets.
It’s not that outlandish if you think about it. Earlier this decade, the median price of a U.S. home climbed nearly 40% in 2 1/2 years, as explained here.
If housing prices can skyrocket, why wouldn’t sports franchises also appreciate? It’s just another symptom of inflation.
Meanwhile, shares of Atlanta Braves Holdings have gained just 23.5% over the past five years. The current market capitalization of the stock is $3.16 billion.
If the smaller-market Padres are worth $3.9 billion, a regional favorite like the Braves could fetch a considerably larger figure.
Bottom Line
I’m not a fan of the Atlanta Braves. The Braves are a divisional rival to my preferred team, the Philadelphia Phillies.
However, when it comes to the markets, I’m a fan of any stock that could potentially add to my bottom line. I’m taking a position in Atlanta Braves Holdings, and will add more on a pullback if appropriate.
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At the time of publication, Ponsi was long BATRA.
