It should be a win for the New England Patriots in Super Bowl LII in Minneapolis on Feb. 4, and the team will beat the current 4.5-point spread.
That's the view of Analytic Investors, the $15 billion quantitative money management subsidiary of Wells Fargo Asset Management. The pick is based on Analytic's NFL Alphas measurement, which ranks all 32 NFL teams based on how often they beat oddsmakers' expectations during the regular season. The theory is that the more a team beats expectations in the regular season, the higher the team's alpha — but the less likely that team will win in the postseason.
And this year, the Patriots — with a 12.4% alpha — is the value choice for the Super Bowl over the Philadelphia Eagles, with 31% alpha this past regular season.
"The Patriots are undervalued," said Matt Robinson, portfolio analyst. "High-alpha teams bias the way people bet. The Eagles were a surprise team this year, and people are projecting that going forward."
For playoff teams this season, the Carolina Panthers had the highest alpha, at 40.2%, and the lowest was the Tennessee Titans, at -9%.
Analytic Investors has correctly picked the Super Bowl winner vs. the spread in 10 of the past 14 years, "and that's 71%, which shows there's a lot of mispricing," Mr. Robinson said.
Last year, however, Analytics' value pick, the Atlanta Falcons, fell to the Patriots 34-28 in overtime despite having a 30% NFL Alpha vs. the Pats' 40% — as well as the Falcons holding a 25-point advantage midway through the third quarter. The Falcons could have put the game away in regulation despite the Patriots' comeback, Mr. Robinson said, but the failure to score any points deep in New England territory gave the Pats the opportunity to win in OT.
"The model doesn't take poor coaching into consideration," Mr. Robinson said.
The full 2017-2018 NFL Alphas report is available on Analytic Investors' website.