Looking for a good spring time investment? Look no further than Churchill Downs (Nasdaq: CHDN – Current Quote), and not only cash in on the Kentucky Derby hysteria, but parlay this fixture into a furLONG-term investment.
The Louisville Kentucky racetrack & casino gaming company, which has increased it’s earnings by over 180% since 2010, is looked by Wall Street as an old dog (or Philly in their case) that doesn’t have any new tricks. But, I don’t see it this way in the least. In fact, I see plenty of room for growth here.
Not only has this company completely revamped and modernized their racetrack venue, by adding several dozen luxury style suites, but this old dog is beginning to invest in the future as well.
First, they have already made major strides in the casino gaming industry by purchasing Harlow’s Casino & Hotel in Mississippi 2 years ago. More importantly, they are also making major moves toward online gaming as well; taking on several new online horse racing wagering sites (YouBet.com & TwinSpires.com).
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Finally, if purchasing Bluff Media (which owns the popular online poker player supersite, BluffMagazine.com) in early February 2012 isn’t a sign that they want their piece of the online gaming pie (when it’s finally legalized), I don’t know what is. (that is, of course, when our short-sighted politicians get their fat heads out of their proverbial asses). The acquisition of Bluff Media may not be a blockbuster deal profit wise and won’t set off any alarms on the Wall Street ticker, but in my opinion, it shows that this company has major plans in the online poker industry (which many estimate to be an industry worth over 200 billion dollars).
So, with the Kentucky Derby ahead (giving sports betters something to get excited about during the football off-season), now couldn’t be a better time buy yourself a piece of this stable horse racing & gaming company that I believe has plenty of room to grow (Buy CHDN Under 60).
Churchill Downs currently has a market cap of $1 Billion; profit margin of 9.5%; a P/E ratio of 16.31; and their last dividend yielded 1%.
(Note: I am LONG on CHDN at a purchase price of 57.63).