According to a recent research report from Technavio, MMA is poised to become a potential juggernaut investment theme over coming years.
Factors helping to drive coming growth include the rising popularity of the sport, the increasing number of MMA tournaments, and the growing popularity of MMA in mainstream fitness programs. North America reportedly is out in front in this trend.
The sport of MMA continues to challenge professional wrestling and boxing for combat sports ascendancy and has witnessed increased popularity with its transition to a pay per view business model.
For investors, this should be an interesting way to drive new growth and diversification on the portfolio side. And for speculators, stocks with exposure to the MMA theme stand to potentially gain meme-stock status given their growth potential.
With that in mind, we take a look at some of the most interesting opportunities in the space.
Endeavor Group Holdings Inc. (NYSE:EDR) is the owner of the UFC, the biggest brand name in MMA. The firm operates through the Owned Sports Properties, Events, Experiences & Rights, and Representation segments.
The Owned Sports Properties segment is comprised of a unique portfolio of scarce sports properties, including UFC, PBR and Euroleague, that generate significant growth through innovative rights deals and exclusive live events. The Events, Experiences & Rights segment owns and operates many events, including the Miami Open, HSBC Champions, Frieze Art Fair, New York Fashion Week, and Hyde Park Winter Wonderland. And the Representation segment provides services to talent and corporate clients and includes content division, Endeavor Content.
Endeavor Group Holdings Inc. (NYSE:EDR) recently announced that CEO Ariel Emanuel will participate in a virtual fireside chat at the Citi AppsEconomy Conference on January 5, 2022 (today) at 11 a.m. ET.
A link to the live session, as well as a replay available for 30 days, will be accessible from the “News / Events” section of Endeavor’s investor relations website at investor.endeavorco.com.
EDR hasn’t really done much of anything over the past week, with shares logging no net movement over that period. That said, the stock has performed well over the past couple months, up nearly 50% since October 2021.
Endeavor Group Holdings Inc. (NYSE:EDR) managed to rope in revenues totaling $1.4B in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 200.6%, as compared to year-ago data in comparable terms. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($1.3B against $2.7B, respectively).
B2Digital, Inc. (OTC US:BTDG) is particularly interesting in this space because it has very well established operations, rapidly growing revenues, and a very cheap price tag on shares.
The company runs the acclaimed B2 Fighting Series, which has seen growing popularity and geographic exposure as a top-tier player in the MMA events space. It also has a growing gym segment, which is integrated with its MMA brand to offer branded fighter training and has seen strong growth in sales and locations over the past year. Overall, the company has gone from making 6 figures on the topline to driving millions in sales over the past 18 months. And the curve appears to be accelerating, but data confirming that should be coming soon as the company gets ready to release data about its December quarter.
B2Digital, Inc. (OTC US:BTDG) most recently announced that the Company has powerfully expanded its licensing range to 20 states and plans to put on 24 live MMA events during the first six months of 2022. Management notes that 24 events during a six-month period would represent a new Company record as well as a 26% jump over its prior record period, which took place during the first half of 2021. In addition, the Company is now licensed to put on live MMA events in 20 states, which represents an 82% jump relative to its geographic range as of one year ago.
According to the release, the expanded pace and widening geographic range combined with the fact that the company is planning to have LIVE Events in 13 states in the first 6 months of 2022 is expected to have a material positive impact on brand awareness while helping to lay a foundation for further growth in the Company’s ONE More Gym Official B2 Training Facilities Network in 2022.
BTDG shares have been strengthening noticeably over the past couple weeks, powering as much as 40% higher in that time on growing volume. The stock is trading at just a fraction of a cent on a per-share basis, but trading volume is extremely liquid. In addition, BTDG shares just broke out above their key 50-day moving average for the first time in over three months.
B2Digital, Inc. (OTC US:BTDG) CEO Greg P. Bell also noted, “Twenty-four events in the first 6 months of next year will represent a significant jump over our live event pace during the first half of 2021, which was a record period in its own right for the Company at the time. In addition, we have now basically doubled our state licensing over the past year, giving us a vastly expanded range of potential venues to continue driving growth in our pace of live events, which has strong implications for both our topline growth and the geographic expansion of the B2 brand – a combination of factors that sets up very well for an unprecedented year of success in 2022.”
Xtreme Fighting Championships (OTC US:DKMRD) is an early stage development company that has recently pushed into the MMA marketplace.
This is a less advanced name than BTDG or EDR, and has a long way to go to reach those levels, making it a more speculative name at this point. But it isn’t without potential.
Xtreme Fighting Championships (OTC US:DKMRD) recently announced that the Financial Industry Regulatory Authority has approved its reverse stock split and symbol change on December 17, 2021. It will begin trading soon under the ticker XFCI.
XFC’s Chairman and CEO, Steve Smith, said “We’re extremely excited to have the reverse stock split and symbol change approved by FINRA in our continued march forward from a regional promotion to an international MMA league and entertainment company. XFC needed to perform both corporate actions to attract institutional investors and retail investors alike who want to invest in the Company’s financial future.”
The stock has suffered a bit of late, with shares of DKMRD taking a hit in recent action, down about -27% over the past week. Over the past month, shares of the stock have suffered from clear selling pressure, dropping by roughly -70%.
Xtreme Fighting Championships (OTC US:DKMRD) pulled in revenues of $346K during the company’s most recently reported quarterly financial data. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities. Again, this is a very early-stage opportunity, and financial data should be taken with a grain of salt.
Other stocks with exposure to MMA or similar themes include DraftKings Inc. (Nasdaq:DKNG), World Wrestling Entertainment Inc. (NYSE:WWE), Madison Square Garden Sports Corp. (NYSE:MSGS), Churchill Downs Inc. (Nasdaq:CHDN), and Scientific Games Corp. (Nasdaq:SGMS).
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