Just Released: The 5 Best Stocks to Buy in October 2022 [PREMIUM PICKS]

Premium content from Motley Fool Stock Advisor Canada “Best Buys Now” Pick #1: World Wrestling Entertainment (NYSE:WWE) It’s not often that …

| More on:
a person prepares to fight by taping his knuckles

Source: Getty Images

Premium content from Motley Fool Stock Advisor Canada

“Best Buys Now” Pick #1:

World Wrestling Entertainment (NYSE:WWE)

It’s not often that a company becomes a more compelling investment after its founder, Chairman, CEO, and controlling shareholder resigns in the wake of a scandal. Nevertheless, that’s the situation we find ourselves in today with World Wrestling Entertainment (NYSE:WWE).

On July 22, Vince McMahon “retired” as chairman and CEO of WWE (though he remains controlling shareholder). After announcing an internal investigation in June, the WWE board of directors uncovered $19.6 million in payments that were not appropriately recorded as expenses in the period from 2006 to 2022, including $14.6 million paid by Mr. McMahon to women to settle sexual misconduct allegations. Mr. McMahon has agreed to personally pay all reasonable expenses arising from the investigation as well as the payments that are the subject of the investigation. This scandal is a stain on Vince McMahon’s reputation and harmful to WWE’s public image, but, ultimately, the payments are not of a material amount for a business that today generates over $1 billion in annual revenue.

Vince McMahon had been instrumental to WWE’s storytelling for decades, but there are signs that his departure may have been a case of addition by subtraction. With McMahon in retirement, Paul Levesque (better known as TripleH) has been promoted to Chief Content Officer, taking creative control of the brand. Since then, interest and ratings have soared.

In August, Monday Night Raw ratings hit a two-year high, while Wrestlemania 39 broke ticket sales records, selling 90,000 tickets within 24 hours — a 42% increase year over year. According to reports, network partners have been “thrilled” with the results since TripleH became head of creative. In short, the value of WWE’s intellectual property arguably has grown in the last few months.

Meanwhile, we remain confident in management’s ability to capture that value. Newly promoted co-CEO Nick Khan continues to negotiate new rights deals with media partners. In September, WWE extended its Caribbean broadcast partnership with C&W Communications and signed a deal with Foxtel to make it the exclusive home for WWE in Australia. In addition, WWE’s second-day rights deal with Hulu has expired, positioning the company to include those rights as part of the bidding for its next extension of Raw and Smackdown coming up next year.

On the consumer products side, WWE relaunched WWE Shop in partnership with Fanatics, positioning the company to offer more products while bearing less of the overhead expenses. In addition, partnerships with Panini in trading cards and Fox’s Blockchain Creative Labs in NFTs continue to expand the ways WWE can monetize its content.

WWE reported record second-quarter revenue and adjusted OIBDA in August, reflecting the strength of the business. With the brand continuing to gain momentum post-Vince McMahon’s departure, we think the company is poised to become even stronger. And, with the largest shareholder now “retired,” the chances that WWE gets acquired are likely higher today than they were a few months ago. Against all odds, the founder resigning in scandal arguably has made our thesis even stronger. Consider adding to or starting a new position in WWE today.

Nick Sciple owns shares of World Wrestling Entertainment. The Motley Fool recommends WWE.

“Best Buys Now” Pick #2:

Redacted

logo

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.

More on Investing

Target. Stand out from the crowd
Investing

2 Canadian Stocks I’m Buying Lots of This Year

I’m looking to snatch up exciting Canadian stocks like VieMed Healthcare Inc. (TSX:VMD) throughout 2023.

Read more »

grow money, wealth build
Dividend Stocks

Got $3,000? 3 TSX Growth Stocks to Buy in January 2023

Top TSX growth stocks that look appealing for 2023.

Read more »

woman data analyze
Dividend Stocks

Need Passive Income? Turn $15,000 Into $851 Annually

This passive-income stock is already climbing higher, up 16% in the last three months! Yet it's still valuable, so you…

Read more »

Senior Man Sitting On Sofa At Home With Pet Labrador Dog
Dividend Stocks

Retirees: 3 Reliable Canadian Dividend Stocks to Buy Now for Passive Income

Top TSX dividend stocks now appear oversold.

Read more »

A red umbrella stands higher than a crowd of black umbrellas.
Investing

2 TSX Stocks Safer for Investing in a Recession

These consumer companies will likely beat the broader market averages amid a recession. These stocks offer stability, income, and consistent…

Read more »

Dividend Stocks

For $100 in Passive Income Each Month, Buy 1,500 Shares of This REIT

REITs such as Northwest Healthcare can enable investors create a passive-income stream as well as benefit from capital gains.

Read more »

A colourful firework display
Dividend Stocks

2 Canadian Growth Stocks (With Dividends) to Start 2023 With a Bang

Here are two of the best dividend-paying Canadian growth stocks you can invest in at the start of 2023 and…

Read more »

sale discount best price
Dividend Stocks

4 Insanely Cheap Canadian Stocks to Buy for Passive Income

The recent bear market has created some incredible bargains, especially for those looking for passive income. Here are four cheap…

Read more »