Hockey Fans: Here’s How to Profit From the Playoffs

Six of seven Canadian teams are out, but the investing game is just heating up.

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It’s just about that time a year again, when the beards grow long and the snow still refuses to melt. For hockey fans, the middle of April marks the beginning of the NHL playoffs, and this year, unless you live in Montreal, you don’t have much to celebrate. But if you’re an investor, this could be a time to load up on some of your favorite hockey-related stocks. Just because your team is heading to the golf course doesn’t mean that the game is over.

So let’s take a look at a few hockey-related stock picks for 2014.

Bauer Performance Sports Ltd. (TSX: BAU)

This sports equipment manufacturer has been around since 1927 but only arrived on the TSX in 2011. The company makes a wide range of hockey gear for players and goalies and is worn by greats such as Alex Ovechkin, Patrick Kane, and Henrik Lundqvist. This one-time subsidiary of Nike has made great strides to diversify itself into a variety of sports, including a recent deal to purchase the baseball and softball division of Easton-Bell Sports for $330 million.

This diversification initiative combined with the exposure gained from the winter Olympics has earned the company a place in RBC’s 7 new favorite Canadian small cap stocks list. The company is trading in a 52-week range of $10.43 to $15.00 and closed Thursday at $14.92, and has a current price target of $17.50.

Molson Coors (TSX: TPX.B)(NYSE: TAP)

When the playoffs are in action, it tends to lead to a bit of drinking, either to celebrate a win or to drown out a miserable run (sorry Toronto). Either way the suds will flow, and while you’re celebrating, why not profit too? Since the merger of Molson and Coors, the company has grown into Canada’s second largest brewery (by volume), and holds a 38% market share in the country.

It also distributes the two of the top three selling brands in the country, Coors Light at number 1 and Molson Canadian at number 3. Add this to a line up of craft brews such as Rickards and Granville Island and you have a substantial lineup of choices to accompany your game night.

Molson Coors is sitting in a 52-week range of $49.25 and $66.00. It closed Thursday at $65.83, and is currently paying out a $0.32 quarterly dividend. This dividend is backed by steady but lower than expected sales of $4.2 billion in 2013 up from $3.9 billion in 2012. Net earnings came in a $565 million in 2013, up from $441 million in 2012, but far below the $674 million it saw in 2011.

Boston Pizza Royalties L.P.(TSX: BPF.UN)

Another opportunity for investors looking to take advantage of the playoff season is Boston Pizza Royalties. This is the pool in which the money paid back from the franchisees flows into the company. The sports bar aspect of the restaurant gives hockey fans a place to watch the games with others and a social place to drink some Molson Coors products (responsibly).

This could be a weaker year, with only one of seven Canadian cities participating in the playoffs. But secondary allegiances or original six roots could continue to bring people out of their homes to watch the games, or at the very least the final round.

Sales for Boston Pizza were $974 million in 2013, of which $14.8 million was deposited into the Boston Pizza Royalty Fund. The company is trading in a 52-week range of $23.94 and $19.22, which it reached on March 21. The stock took a hit when it was announced that parent company Boston Pizza International would be releasing 1.6 million shares to a syndicate of investment dealers at a price of $21.10 per share. Since then the stock has begun to climb back up closing Thursday at $19.89.

Bonus for fellow Canuks fans

If you are a fan of the Vancouver Canuks and this past year has left you looking to relive the better days, you could check out Madison Square Garden Company (NYSE: MSG). For those who don’t know, this company is the owner of the New York Rangers — the new home of former coach Alain Vigneault.

Foolish bottom line

No matter which stock you consider, one thing is clear. The biggest loser of this spring will be Bell (TSX: BCE)(NYSE: BCE) and TSN. Over the past few years they have been sharing the playoff load with CBC, and now with Montreal as the only Canadian team in the running, they can expect advertising revenues to take a noticeable drop. This was TSN’s last chance to make some playoff dollars as the broadcast rights transfer over to Rogers Communications (TSX: RCI.B)(NYSE: RCI) next year, which also includes CBC’s advertising revenues.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Cameron Conway does not own any shares in the companies mentioned.

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