As we all expected, the new administration of incoming President Donald Trump has caused all sorts of market upheavals.

Many areas of volatility – like tariffs – were predicted by many.

However, there are some other areas where he has made proposals that have shaken up stocks unexpectedly.

Today’s HX Trader idea is one of these opportunities.

One of the rarest and most valuable franchises on Earth that has sold off on Trump concerns.

We don’t know whether those concerns will ultimately be valid or not, but we DO KNOW that this stock is a buy!

Here is the idea…

The company is sports franchise owner, Madison Square Garden Sports Corp. (NYSE: MSGS).

This company owns the NBA's New York Knicks and the NHL's New York Rangers. They also own several minor league teams related to these franchises.

We have always been huge fans of these publicly traded sports franchises at HX Research.

They are unique assets that cannot be replicated. We have also seen a massive expansion in the super-rich – people and entities – interested in owning these franchises.

MSGS is even more unique as it owns two of the most iconic franchises in their respective sports in the biggest city in the United States!

The simple math to understand is that MSGS’ current market capitalization is just about $5 billion. They have minimal debt.

Looking at the value of their franchise, the most recent Forbes valuation pegs the Knicks at a $7.5 billion valuation, the second most valuable franchise in the NBA.

Forbes also puts the value of the Rangers at $3.5 billion. This is also the second most valuable franchise in its respective league, the NHL.

This is a combined value of $11 billion.

Historically, we have NEVER seen a sale of marquee franchises like these happen at these values. Typically, it has been at a premium, and it would be a hefty premium for New York.

We think they are worth at least $15 billion.

Why is the stock trading at only one-third of that value then?

First, there is no indication that the owner – James Dolan – wants to sell. He controls all the voting shares and has shown no indication he would be willing to sell.

We think he will eventually get a bid too good to refuse ($15 billion!) and sell the teams.

When? We have no idea, but we like buying these types of assets at a HUGE discount.

His lack of interest in a sale also has not stopped the stock from increasing as teams’ values have increased.

Here is a chart of the stock since trading started in 2015…

At the recent high of almost $240 per share, the stock has nearly doubled over this period. Meanwhile, the value of the franchises has grown two to three times over the same period.

At the end of the chart, though, you can see that the stock has recently sold off.

Here is a short-term stock price chart along with the relative strength index or “RSI” of the shares…

From that high in mid-November, the stock recently traded almost to $200 per share or went down nearly 20%.

Why is the stock down?

The first concern was their television contract with their sister cable network, Madison Square Garden Networks. That company is in negotiations with its banks, given its heavy debt load and changes in the cable market.

There are concerns that the deal with MSGS might need to be renegotiated lower.

We don't think that happens, and we believe that if there were a new deal with a new partner (like Amazon), the value might be HIGHER, not lower.

Regardless of the company's value of assets being just one-third of the value, we don't really care.

The second move down in the stock came just in the last week when Trump floated the idea of removing some of the favorable taxation available to owners of sports teams.

They are allowed to flow through losses to shield ordinary income and depreciate the team's purchase price. These can be substantial tax savings for the ultra-wealthy owners.

Do we think these changes go through?

We doubt but also think there is a much larger universe of buyers for these franchises.

The stock is so oversold it triggered our RSI "buy" signal of trading below 30 RSI and is recovering back above that level.

Here is a table showing how the stock has done in the last decade after it triggered this signal…

Buying the stock has been a high-probability bet.

We think it is going to work out again, and we will bet on MSGS stock for our readers' profit win!