Best stocks to buy now: Can one of the biggest football club’s stocks boost my portfolio?

This Fool explores whether Manchester United stock could boost his portfolio and whether MANU is worth its place on his best stocks to buy now list.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Manchester United (NYSE:MANU) is one of the most recognisable and successful sports teams in the world. It is on my best stocks to buy now list and I want to explore whether it would be a good addition to my portfolio.

Manchester United’s share price

As I write this, the Manchester United share price is trading for just over $17. It was boosted by news of a record shirt sponsorship deal with software giant TeamViewer last week. A week earlier, its price faltered after the news that 5m shares were being sold by the Glazer family, who own a majority stake. This equates to 3% of total shares. 

Prior to the market crash back in March last year, MANU’s share price was over $20. At its lowest point in the crash, shares were trading for just $12 which is a 40% drop. Since that low, its price has been fluctuating for a number of reasons, some of which I have mentioned.

The Covid-19 pandemic has massively impacted Manchester United and its income, but more on that later. I still believe at its current price, there is an opportunity to pick up cheap shares, which is why I place it on my best stocks to buy now list.

Football without fans

The past year has seen the absence of fans within stadiums. Manchester United possesses the largest club football stadium in the UK, boasting an attendance of over 74,000. Naturally, the Covid-19 crisis has affected revenue as it is estimated match day revenue can total approximately £6m per home game.

In a recent trading update, Manchester United posted a £63.9m profit for the three months to 31 December. Total revenue rose by 2.6% to $172.8m compared with the same period last year. Match day revenue fell 96% due to the pandemic. Commercial revenue declined 11% but broadcasting revenue rose 68%. This timely boost would have been due to the Premier League’s promise to broadcast all league games as fans cannot attend stadiums yet. MANU is one of the most broadcast sports teams across the world.

Best stocks to buy now still present risks

Manchester United has a lot of debt. Currently, it stands at over £400m. This can affect operations off the pitch, which in turn affect performances on it and fan appeal, which affect marketability. The club has not won any silverware for four years now. Furthermore, the sale of almost $96m worth of stock from its owners could also be a sign of those at the top cashing in on a company they may not have utmost faith in either. 

I believe the current Manchester United share price is a bargain. With the vaccine rollout, I believe fans will return to stadia and match day revenue will roll in once more. Furthermore, the recent sponsorship deal worth $275m (a world record amount, matching FC Barcelona’s £47m a year deal) will boost the coffers and investor confidence.

On the pitch, Champions League qualification is beginning to look a certainty for next season. The extremely lucrative European club competition boosts income and worldwide profile massively.

Manchester United is firmly on my best stocks to buy now list as I believe it could be a contrarian reopening stock and enhance my portfolio. I am also looking at other alternatives like this FTSE penny stock for my portfolio.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Jabran Khan has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Investing Articles

How much would I need to invest in income shares to earn £300 a month?

What kind of lump sum would be required to earn £300 a month by taking advantage of some of the…

Read more »

Investing For Beginners

Up 31% in a month, could this FTSE 250 stock be getting bought out?

Jon Smith takes a look at speculation that's pushing the share price of a FTSE 250 share higher and considers…

Read more »

Investing Articles

Here’s how I’d follow Warren Buffett to start building passive income in 2025

Ben McPoland highlights one FTSE 250 firm with a strong competitive edge that he thinks can continue rewarding investors with…

Read more »

Investing Articles

Burberry shares: undervalued FTSE gems that are ready to rocket?

Burberry shares soared at the beginning of the week as the takeover rumour mill went into overdrive. Is Paul Summers…

Read more »

US Stock

Here are the latest share price forecasts for S&P 500 giant Amazon

Amazon has generated monster gains for investors over the last decade. And Wall Street analysts believe the S&P 500 stock…

Read more »

Man writing 'now' having crossed out 'later', 'tomorrow' and 'next week'
Investing Articles

2 high-yield FTSE 250 shares I’d buy today — and 1 that I’d avoid

UK markets have felt some volatility after last week’s Budget and the FTSE 250 was no stranger to it. Our…

Read more »

Investing Articles

3 reasons the Rolls-Royce share price could soar over the next decade

Sustainable aviation fuel, narrow-body aircraft, and small nuclear reactors could all keep the Rolls-Royce share price climbing over the next…

Read more »

British flag, Big Ben, Houses of Parliament and British flag composition
Investing Articles

Here’s how much income I’d get if I invested my entire £20k ISA in cheap BT shares

BT shares are on the up but still cheap, while the FTSE 100 telecoms stock offers a good yield too.…

Read more »