5 Olympic Stocks to Watch for the Tokyo Games
Did you know that since the 1984 Los Angeles Olympics, every country that has hosted the Olympics has seen higher share prices by the end of that year?
It’s one reason why traders and investors are focused on Olympic stocks for the Tokyo 2020 Olympic games. Below is a list of a few stocks to watch as we get closer to the games scheduled to start on 23 July 2021.
Table of Contents
5 Olympic Stocks for the Tokyo Games
Below is a quick list of some of the top Olympic stocks to watch for the Tokyo 2020 Games.
Be sure to keep on reading as we go into them in much more detail below and how to invest in them with low commissions using state of the art trading software that is completely free to access.
- Fujitsu - Gold Partner and Data Centre Hardware Provider
- Cisco Systems - Official Partner and Network Equipment Provider
- Panasonic - Supporting Partner of the Tokyo 2020 Olympic Torch Relay
- Shimizu - Provider for Construction Services for Facilities and Public Infrastructures
- NEC Corp - Official Sponsor and Private Network Radio Systems Provider
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2020 Tokyo Games: The Road so Far
The Tokyo Olympics was originally due to take place last year but has been postponed due to the coronavirus pandemic. The 2020 Summer Olympic Games are now due to take place between 23 July and 8 August 2021, with the Paralympic Games between 24 August and 5 September.
However, while Japan experienced a relatively low number of coronavirus cases compared to other nations there has been some doubt on whether the Games will actually take place. More than 80% of the population want the Games postponed or cancelled.
In the contract between the International Olympic Committee (IOC) and Tokyo, only the IOC can cancel the event. The Committee has repeatedly stated that the games can go ahead safely even under a state of emergency (which Japan is currently in).
Currently, no international fans can travel to Japan to watch the Olympics which is a shame for travel and hospitality companies. Local fans may be able to attend and companies sponsoring the event are still likely to receive an advertising boost.
5 Olympic Stocks for the Tokyo Games: Research & Analysis
The five Olympic stocks listed below is a small selection of the companies that are involved in the Games but could receive a boost due to their association. Some companies are directly involved in managing the Games, some provide services and equipment and some are likely to receive an advertising and marketing boost from sponsorships.
When managing a portfolio, diversification is important. You don’t want to be overexposed to just one sector in case it performs badly. Having exposure to different stock sectors and companies can help to provide diversification. When one sector performs badly another sector may perform well, thereby helping to balance the portfolio.
As always, make sure you do your own thorough research before making any decisions, or test them on a demo trading account first which you can open with Admirals for FREE!
1. Fujitsu (6702.JP)
Fujitsu Ltd was one of the original Gold Partners of the Tokyo 2020 Games under the category of ‘Data Centre Hardware’ provider. The company is a huge Japanese multinational information and communications technology equipment and services company.
In fact, Fujitsu it is one of the world’s largest IT service provider when measured by annual revenue and is bigger than companies such as IBM and Accenture. Listed on the Tokyo Stock Exchange, it is on the Global 500 Companies List and was named as one of the world’s most admired companies by Fortune.
This is reflected in its share price which has been on an incredible run higher in recent years, as shown below.
Source: Admirals MetaTrader 5 Web, 6702.JP, Monthly - Data range: from 1 Jun 2019 to 18 Jun 2021, performed on 18 Jun 2021 at 1:30 pm GMT. Please note: Past performance is not a reliable indicator of future results.
For much of 2002 to 2019, the Fujitsu share price traded in a narrow range between 10,495 and 2,690. This period of time formed a consolidation price action pattern. The price eventually broke out in 2019 and has not looked back since.
What is most interesting is that the share price is still well below the all-time high price level of around 50,300 recorded in 2000. This provides significant upside which has already been boosted by its status as an Olympic stock.
2. Cisco Systems (CSCO)
Cisco Systems is an Official Partner of the Tokyo 2020 Games under the category ‘Network Equipment.’ The company has worked in this category in previous Olympic and Paralympic Games. Under the Network Equipment category, the company helps with the communication of complex Games-related information and images.
The company assisting the Games is Cisco Systems G.K which is a Japanese subsidiary of Cisco Systems which is listed on the Nasdaq Stock Exchange. Overall, the company is the most dominant player in networking hardware for businesses, agencies and corporations.
Recent earnings data has been positive with revenue on the increase after a significant drop during the coronavirus pandemic. Therefore, the stock price has many growth-based influences which is why many analysts have started to increase their price target – some even to $100 which represents significant potential upside.
Source: Admirals MetaTrader 5 Web, CSCO, Monthly - Data range: from 1 Apr 2009 to 18 Jun 2021, performed on 18 Jun 2021 at 1:30 pm GMT. Please note: Past performance is not a reliable indicator of future results.
From a technical analysis perspective, it’s clear to see the long-term price has been trending higher. However, the price had a significant dip in 2019 but has since recovered.
At current levels, the price is less than 10% away from its multi-year high of around $58.00 recorded in 2019 presenting a good amount of potential upside.
3. Panasonic (6752.JP)
Panasonic Corporation was announced as a Worldwide Partner of the Olympic and Paralympic Games. It is also a Supporting Partner of the Tokyo 2020 Olympic Torch Relay. The company is one of the largest electronic companies in Japan.
Restructuring plans by management has helped to attract more investors. The company’s production of Liquid Crystal Displays (LCDs) has been a loss-making division for many years due to increased competition from South Korean manufacturers. Panasonic has now stopped making these altogether and also sold off its semiconductor business.
The focus for the company is now on its largest revenue generators which are in appliances and life solutions. However, in 2014 Panasonic struck a deal with Tesla to produce automotive batteries. The company sank a huge amount of capital to build a production facility in Nevada and is only now starting to see a profit from it.
Source: Admirals MetaTrader 5 Web, 6752.JP, Monthly - Data range: from 1 Jun 2002 to 18 Jun 2021, performed on 18 Jun 2021 at 1:30 pm GMT. Please note: Past performance is not a reliable indicator of future results.
The long-term, monthly price chart of Panasonic shares shows a period of consolidation between 2015 and 2021. The price has struggled to break through price levels just below 1872, as well as 750.
This ranging chart pattern has attracted some buyers. Most notably, at the bottom of the range around the 750 price level. Currently, the price sits in between the trading range but could be headed towards the top where buyers have another chance to try and breakthrough.
Panasonic’s exposure to the Olympic Games and its deal with Tesla could be some of the major influences on whether the price will eventually break through this range and move back towards its all-time high price level of around 2870, recorded in 2005.
4. Shimizu (1803.JP)
Shimizu Corporation was announced as an Official Supporter of the Tokyo 2020 Games under the category ‘Construction Services for Facilities and Public Infrastructures.’ The company was founded in 1804 and is regarded as one of the top 20 construction contractors in the world.
Source: Admirals MetaTrader 5 Web, 1803.JP, Monthly - Data range: from 1 Jun 2002 to 18 Jun 2021, performed on 18 Jun 2021 at 1:30 pm GMT. Please note: Past performance is not a reliable indicator of future results.
While the share price has struggled in recent years, analysts are expecting a rebound in the construction sector due to the reopening of the economy after the coronavirus pandemic. As economies grow, infrastructure grows as well making Shimizu an interesting as a long-term value investing play.
5. NEC Corp (6701.JP)
NEC Corporation was announced as an Official Sponsor of the Tokyo 2020 Games under the category ‘Private Network Radio Systems.’ The company struck a contract to use their facial recognition technology to allow spectators into the arena.
While international travellers may not attend the Tokyo Games, there are talks to open the doors to locals. The recent earnings report for NEC Corp has also been encouraging with a much higher than expected earnings per share figure.
Source: Admirals MetaTrader 5 Web, 6701.JP, Monthly - Data range: from 1 Jun 2002 to 18 Jun 2021, performed on 18 Jun 2021 at 1:30 pm GMT. Please note: Past performance is not a reliable indicator of future results.
NEC’s share price has been rising steadily since 2016 with clear higher high and higher low cycle formations – a pattern often used by technical analysts to confirm a trend.
The price is still some distance off its all-time high price level of 34,500 recorded in 2000. It’s unlikely to see those levels anytime soon but the recent price action has been encouraging for the bulls.
By the way, if you're interested in getting more in-depth analysis of how the Olympic Games will affect the markets this year and how you can trade them, have a look at our video below.
Professional trader and analyst Jens Klatts reveals which areas profit the most from the different market opportunities that arise during the Games, how the host country profits in terms of its equity index and much more:
When to Invest in Olympic Stocks
A common question among newbie investors is when to invest in the stock market? In particular, with Olympic stocks, the timing will be important. However, it can be difficult for both new and experienced investors to time the market.
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Source: Premium Analytics, 20 June 2021
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Conclusion: Olympic Stocks
The Olympic Games are a big deal. Statistically, there is a tendency for the host nation’s stock market to perform better than in the prior year during the Games. This is why the Japanese stock market has garnered so much attention.
While the situation is a bit different this year due to the coronavirus pandemic, many Olympic stocks have already started to gain attention from investors. In this article, we’ve discussed a few of these Olympic stocks for you to get started with.
One of the best ways to actually get started is to open a FREE demo trading and investing account with Admirals. This will allow you to test out all of the features and services for yourself in a virtual environment.
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