Well the baseball season is finally underway. And the Crimmins household is hoping the New York Mets finally break their long cycle of losing on the backs of their young pitching staff. It’s been a while since Maureen and I attended game seven of the 1986 World Series to see our beloved Mets win the baseball championship.
But what I want to discuss in this blog is not the NY Mets season, but the sale in March 2015 of one of the iconic companies associated with baseball: Hillerich & Bradsby Co. This company which is based in Louisville Kentucky makes the famous Louisville Slugger bats. Louisville slugger has signed a long roster of well-known professional players including the famous Babe Ruth and Lou Gehrig to endorsement deals over the years. However, the modernization of the game especially at the high school and college level has led to non-wooden bats eroding some of their potential market. Hillerich is a family run business and thus has been unable to invest at the level of some of its competitors which has hurt its ability to compete in the marketplace.
As part of the deal, Hillerich will continue to make the bats, but the rights of the bat and the selling of the bats will now be done by Wilson Sporting Goods Co. Wilson which is better known as a glove maker, is a unit of the Helsinki-based Amer Sports Corp. Amer Corp. also owns a collection of other well-known sports brands including ski gear purveyor Salomon and workout machine maker Precor. We own one of the Precor treadmills. Precor’s professional gym equipment is used by fitness clubs, hotels, spas, and individual exercisers in over 90 countries across the world.
This transaction highlights how companies compete on a global basis both for consumers as well as investors. We regularly talk about the need to invest in the great companies both here in the United States and abroad. This small Helsinki based company is a great example of a company that is selling products that most Americans would believe are American products.
One of the companies that has catered to the new modern non-wood bats being used in high school and college is DeMarini. My daughters used these bats while playing travel softball. DeMarini is an American manufacturer of baseball and softball bats and other sports equipment and is headquartered in Oregon. Well – DeMarini is already a subsidiary of Amer Sports.
Mavic is another of Amer Sports global brand. Mavic is a French manufacturer of bike systems and rider’s equipment and was established in 1889. This company is well-known in the sport of cycling for its quality and the famous yellow brand. They continue to manufacture in the heart of the French Alps.
The Amer Sports stock trades on the Helsinki stock exchange and is one of the 8,000+ stock holdings located in 44 countries that we regularly own for our clients. The Helsinki stock exchange is located in Helsinki, Finland. This exchange is now owned by NASDAQ as of February 2008 and is now officially known as the NASDAQ OMX Helsinki.
This recent transaction allows American investors to understand the power of diversifying into a globally diversified portfolio of companies selling well-known products. So while at the next baseball game watching the players use Louisville Slugger bats while drinking a Bud Lite (also a product of a foreign company – Belgium Anheuser-Busch InBev), think of the benefit of owning stock in foreign companies.
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