While most of the country will be glued to the football in Russia this week, the markets will still be open. Do some companies stand to make a profit, however, if the England football team develops a winning habit?
Mark Swain, who is the manager of the Smith & Williamson Enterprise Fund, thinks he has the answers.
First up is Tesco. Swain says the hard discounters have created a difficult trading environment for Tesco shares in recent years, and we would agree, but the rate of growth is slowing for discounters like Aldi and market growth now exceeds space growth for the first time in a decade. Swain reckons that if the England football team does manage to stay in the tournament – and the weather is reasonable – that should support demand for both alcoholic drinks and BBQ/snack foods, where Tesco has an attractive offer, including popular branded items.
Smith & Williamson thinks 250p is undeniably an important level for Tesco shares but remains positive on the stock.
ITV set to profit if England do well
ITV also stands to benefit if the England football team does well. For starters, viewers are more likely to stay at home for the duration of the tournament, which will also prove to be a boost for the supermarkets. Previous World Cups have shown that viewing interest can tail off very quickly if the England football team exits before the knock out stages.
Bear in mind that ITV has first pick of the semi-finals if the England football team gets through to the knock-out stages. ITV also has the crucial rights for the England vs Belgium game which is likely to be followed widely and will be critical for England’s prospects in this tournament.
ITV shares, a favourite with our readers, have been doing well recently, and hit 174 on 14 June, up from 162.60 at the end of May. Year on year revenue is up 7.24%.
JD Sports, while more focused on fashion than football, could be another beneficiary if England can find the back of the net consistently.
“We would expect a decent tournament for England to be supportive for the likes of JD, and supportive of the ‘athleisure’ trend more generally,” says Swain. “JD is becoming a global brand, and we expect it to remain in the box seat as the likes of Adidas and Nike consolidate their long retailer lists and build out their DTC [direct to consumer] offerings.”
Check back with The Armchair Trader tomorrow to find out which companies will lose out if England does well and which will struggle regardless.