List: Best NBA Financial Invesments

Image via ballinroll.com

 

Amongst the talk of player movement, best fit, and market value, it’s easy to get lost in the sea of information as it relates to NBA player contracts. While I have a personal issue with discussing players as commodities, in the words of the world’s greatest player – ‘this is a business’. So, giving way to the prevailing wisdom that this game is indeed a business, I decided to compile a list of the NBA players that currently constitute the best investments from a team perspective.

Some notes before we begin – what I have aimed for here is a range of metrics that are comparable to common financial metrics used to evaluate stock investments. The following is a short glossary to explain my equivalent measures.

Price = Contract Value

Earnings = Net Box Plus/Minus

Equity = Usage Rate

Debt = Turnover Rate

From this, I’m using the following metrics to evaluate the players as investments. I’ll state the league average to give a baseline indication of high or low.

Price/Earnings = (Net BPMx1000000)/Contract: This will give an indication of who costs the least BPM, technically we have flipped it to Earnings/Price – the higher the number the better. League average -0.25

P/E over Expected Growth = Net BPM/Contract/Age: This is an attempt to find the best P/E ratio with the highest potential upside on the basis of the player’s age. Higher the number the better, league average -0.05

Debt to Equity = Turnover Rate/Usage: This will give an indication of the ‘safest’ players. The players who aren’t liabilities in terms of handing the ball back to the opposition relative to how often they touch the ball. A lower number is better, league average 0.68

Return on Equity = Net BPM/Usage: This figure will show those players who generate the most value per possession, in theory, an indication of the best return per equity in terms of dominating the play or possession. A higher number is better, league average -0.01

Beta = Game Score Standard Deviation: Beta is a measure of a stock’s volatility. For our purposes, Game Score Variance will demonstrate the variability in a player’s night-to-night performance.

The List

10.

Player 2018-19 BPM/Contract BPMC/Age TO/USG BPM/USG
Daniel Theis 1,378,242 2.18 0.43 0.63 0.19

Top 5 for BPM/Contract and BPMC/Age. The only league average for TO/USG but at 1.3 million for 2018-19 Theis represents the 10th best financial investment on the combination of these metrics. A beta of 5.7 shows low volatility especially for a player whose minutes are inconsistent.

9.

Player 2018-19 BPM/Contract BPMC/Age   TO/USG BPM/USG
Kyrie Irving 20,099,189 0.33 0.06   0.40 0.23

Despite his growing reputation as a player who is detrimental to team chemistry Irving comes in at 9th best value. Irving is not in the top 10 of any one metric but is in the top 15% for each metric across the board and at 20 million he outperforms his price. Beta of 8.3 is worth noting – this stock could be more consistent or at least you might hope at that level of volatility for the peaks to be higher and the overall production to be somewhat greater.

8.

Player 2018-19 BPM/Contract BPMC/Age TO/USG BPM/USG
Mitchell Robinson 1,485,440 4.44 0.99 0.81 0.55

Knick fans can guide me here – what is Mitch Robinson’s nickname? I’ve heard the Blockness Monster? Judging by the way he is talked about online I suspect ‘Our Lord and Saviour’ is not beyond the realm of possibility. The 8th best financial investment is actually doing him a slight disservice. Robinson is the single best value per price, value per price and age and represents the number return on equity based on limited usage. His rank is only bought down by the fact that he turns the ball over and an above average rate. A beta score of 6.1 could be lower on only 12% usage but consistency should develop as the stock ages.  

7.

Player 2018-19 BPM/Contract BPMC/Age TO/USG BPM/USG
Pascal Siakam 1,544,951 2.20 0.45 0.61 0.17

One of 2018-19 best stories and biggest break out players, Siakam is outstanding value at only 1.5 million. Like Robinson, his value is only diminished by a turnover ratio that is around the league average.

6.

Player 2018-19 BPM/Contract BPMC/Age TO/USG BPM/USG
Giannis Antetokounmpo 24,157,304 0.43 0.09 0.48 0.33

At 24 million Giannis might not immediately seem like a value prospect because he costs real money. The fact that he is the 6th best financial investment on the combination of these metrics is indicative of his status as a genuine blue chip stock. His BPM per Usage is especially impressive when you take into consideration how high his usage is. Of the top 5 players for BPM/Usage (Mitch Robinson, Rudy Gobert, Nikola Jokic, Giannis and Nerlens Noel) Giannis has the highest usage at 32%. Jokic is also impressive with a usage of 27% but their company in the top 5 are all genuine shot-blocking rim running players with usage below 17%. A beta score of 7.7 is excellent given his usage.

5.

Player 2018-19 BPM/Contract BPMC/Age TO/USG BPM/USG
Montrezl Harrell 6,000,000 0.72 0.14 0.46 0.19

Often classed as a stereotypical ‘energy guy’ Montezl Harrell has had the type of season that will see him get paid well when he hits free agency. Harrell is in the top 10% for all metrics but TO/USG where he is in the 20%. At only 6 million he is excellent value by the numbers. A beta score of 6.9 is acceptable volatility given a usage right of slightly over 20%

4.

Player 2018-19 BPM/Contract BPMC/Age TO/USG BPM/USG
James Harden 30,431,854 0.37 0.07 0.38 0.28

Much like Giannis Harden mints himself this season as a legitimate blue-chip stock. Ever at over 30 million a season Harden still rates as the 4th most sound NBA investment. Despite a usage rate of 40%, a lucrative contract and being almost 30 – elements which could be detrimental to his value for money Harden still outperforms his contract. Top 10 for BPM to Usage even with a 40% usage rate and top 12% across the board for all other metrics. His beta score of 9.8 is the most volatile on this list but that is to be expected for a player who shoots as many 3s as he does on a virtually unprecedented usage rate.

3.

Player 2018-19 BPM/Contract BPMC/Age TO/USG BPM/USG
Anthony Davis 25,434,263 0.34 0.07 0.27 0.29

Another blue-chip stock – these metrics quantify why Davis is so coveted around the league and why his request to leave has put a cat amongst the proverbial pigeons. Davis is the second most valuable in terms of TO/USG and 6th for BPM/USG. At only 25 years he fully deserves status as the 3rd best investment opportunity for NBA teams. A beta score of 9.5 suggests volatility however we have to factor in that his recent minutes reduction will affect that consistency.

2.

Player 2018-19 BPM/Contract BPMC/Age TO/USG BPM/USG
Karl-Anthony Towns 7,839,435 0.92 0.19 0.47 0.26

Top 5% in the league for all metric bar TO/USG, which he is still in the top 25% for, at a little under 8 million KAT is an outstanding investment opportunity. At 23 years old and with an all-around offensive game and improving defensive awareness you could scarcely find a better short or long term investment. A beta score of 8.6 could be lower for absolute confidence but given his age and the volume of offense that goes through him, this should not deter investors.

1.

Player 2018-19 BPM/Contract BPMC/Age TO/USG BPM/USG
Nikola Vucevic 12,750,000 0.56 0.11 0.35 0.26

Owing to a much improved and productive season 28-year-old Nikola Vucevic is the number one best value investment based on the 2018-19 season. Half of the players on this list are All-Stars but only one – Vucevic – costs this little. At 12.75 million he costs basically half what you would expect to pay for a player with this level of production. Sitting between the 4th and 9th percentile for each metric Vucevic also has a beta score of only 6.8 which makes him the 3rd least volatile stock in the top 10.

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