20 Stocks Pulling for the Panthers

Why chipmaker Cirrus Logic, Inc. (NASDAQ:CRUS), home builder Toll Brothers Inc (NYSE:TOL), and drugmaker Eli Lilly and Co (NYSE:LLY) are rooting for the Carolina Panthers in Super Bowl 50

by Alex Eppstein

Published on Feb 4, 2016 at 2:29 PM
Updated on Feb 4, 2016 at 3:00 PM

In just a few days, the Carolina Panthers will square off against the Denver Broncos in Super Bowl 50. The game pits Panthers QB (and likely NFL MVP) Cam Newton against future Hall of Famer Peyton Manning. But what bearing does this game have on the stock market?

It turns out that, historically, some stocks outperform when the NFC beats the AFC, and vice-versa. Schaeffer's Senior Quantitative Analyst Rocky White ran the numbers, and identified 20 stocks that have averaged a positive return for the rest of the year, and been positive more than half the time, when the NFC wins the Super Bowl -- while at the same time averaging a loss and being positive less than half the time when the AFC takes the title.

Below is the list, courtesy of White, of the 20 stocks rooting for Carolina to win on Sunday, based on historical returns. Among them are chipmaker Cirrus Logic, Inc. (NASDAQ:CRUS), home builder Toll Brothers Inc (NYSE:TOL), and drugmaker Eli Lilly and Co (NYSE:LLY). In order to qualify, each stock must have had at least five returns when each conference wins the Super Bowl. 

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When the  NFC wins the Super Bowl, CRUS has averaged a return of 32.1% over the rest of the calendar year, and been positive 60% of the time. By contrast, when the AFC wins, the stock has a return of negative 3.4%, and is positive just 36% of the time.

Technically speaking, the shares have been on fire since hitting a 2016 low of $25.09 in mid-January, up over 34.6% at $33.78. However, CRUS is once again struggling to break north of the $34-$35 area, which contained a previous rally in early December. If the stock can clear that overhead zone, it could send option bears running to the hills. Cirrus Logic, Inc. sports a 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 3.82 -- in the 97th percentile of its annual range.

Meanwhile, TOL's typical rest-of-year return after an NFC Super Bowl victory is nearly 30%, with 61% positive. However, when the AFC wins, the stock's return is negative 0.3%, on average, with 45% positive.

On the charts, TOL is up 1% today at $27.11, but just yesterday hit a three-year low of $26.06. Option traders have been rolling the dice on downside for the shares, according to data at the ISE, CBOE, and PHLX. Specifically, Toll Brothers Inc's 50-day put/call volume ratio registers at 1.62, outstripping 92% of all other readings from the past year.

Finally, LLY has fared well after NFC Super Bowl wins, averaging a rest-of-year return of 21.6%, and positive an astounding 83% of the time. By contrast, when the AFC team takes the crown, the stock's return is positive just one-third of the time, with an average loss of 2% for the rest of the year.

Today, LLY is off 2.5% at $74.15 despite a $1 price-target hike to $106 at Berenberg, and since hitting a record high of $92.85 in September, the shares have shed one-fifth of their value. That hasn't prevented analysts from taking a glass-half-full approach toward the stock. In fact, 75% of analysts tracking Eli Lilly and Co consider it worthy of a "strong buy" rating, with not a single "sell" assessment on the books. If the Broncos win on Sunday and/or the stock suffers yet another February flop, a round of downgrades could ensue.

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