Baseball's Spring Training: Equities Edition

Joel Anderson  |

"For lo, the winter is past, the rain is over and gone;
the flowers appear on the earth;
the time of the singing of birds is come,
and the voice of the turtle is heard in our land."

-Song of Solomon

For decades legendary Tigers broadcaster opened the new baseball season with that quotation from the King James Bible. Now, the time of the year has come again where baseball fans eagerly turn their eyes south while the pending new season ramps up. Pitchers and catchers have reported to various Florida and Arizona locations and the thrilling promise of a new season has baseball fans everywhere believing again. Even Cubs fans.

So, how does this apply to equities? Well, as the year progresses, one could argue that there are a few companies that are in similar straights to certain baseball teams going into this next year. Case in point...

St Louis Cardinals and Apple (AAPL)

The St. Louis Cardinals have done it. After coming down to their final strike not once but twice, the Cards managed to dispatch the Texas Rangers to become the World Series champs. Apple, meanwhile, has recently seen its share price rise over $500 a pop, pushing it into the top spot as the highest valued company in the world. Apple's market cap pushed past Exxon Mobil (which is, incidentally, based out of Texas) to carry the team, err, company to new heights. However, both Apple and St. Louis will have to face the new year without a prominent presence. St. Louis lost slugger Albert Pujols, arguably the game's best player and a shoe-in for the hall of fame, to the team from Southern California called the Angles that hasn't really been able to settle on where it's from. Apple, likewise, has to carry on without founder and former CEO Steve Jobs, who passed this last year. Both Apple and St. Louis have reasons to be optimistic about the next year, but both will have to settle in the long term how they will deal with the absence of their top players.

Atlanta Braves/Boston Red Sox and Netflix (NFLX)

The final week of the 2011 baseball season was filled with excitement, and the Tampa Bay Rays and St. Louis Cardinals both managed to punch their tickets to the postseason on the final day of play. However, for all the glory for those two teams, it was the unprecedented collapse of the Braves and Red Sox that allowed for this. Both the Braves and Red Sox had considerable leads for the wild card spot before experiencing truly epic collapses and missing the playoffs on the final day of the season. And, of course, when one says the words "epic collapse" in the context of equities, it's hard not to immediately think of Netflix. Netflix didn't blow a nine game lead in September, but it did blow almost $13 billion in market cap last summer. Netflix went through a series of very public missteps (like the scandal surrounding reports that Red Sox pitchers were eating fried chicken and drinking beer in the clubhouse at times) while trying to separate its DVD and steaming services, ultimately costing the company over three quarters of its share value. Now, Netflix, like the Red Sox and Braves, enters a new season hoping to make up for what it lost last year. However, the company is facing serious headwinds from well-monied competitors entering its market space--like the new joint venture between Verizon (VZ) and Coinstar (CSTR)--not unlike the Sox and Braves who have to contend with the division rival Yankees and Phillies respectively.

Chicago Cubs and United States Steel (X)

These are two organizations that look back fondly on the year 1908.

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DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not necessarily represent the views of Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to:

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