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By Nathan Slaughter

Personally, I'm not much of a racing fan. But I'm probably in the minority in my neck of the woods (Louisiana).

Nationwide, there are millions of avid fans glued to every race -- particularly the high-profile NASCAR Sprint Cup events. Last year, the Daytona 500 drew a television audience of more than 16 million. That's more than the number of people who tuned in for game three of the Phillies/Yankees World Series.

But it's not just a TV audience NASCAR pulls in, it's also the largest spectator sport in the United States.

Legions of loyal fans pack each race to capacity (Daytona is often brimming with nearly 170,000 spectators). And they wouldn't even think about straying -- any more than a Boston Red Sox fan could envision a home game somewhere other than the hallowed grounds of Fenway Park. So, longstanding NASCAR events aren't likely to be shuffled to a competitor's facility.

The popularity of these tracks forms an impenetrable barrier for International Speedway (NASDAQ:ISCA) against potential competitors. The company owns and operates 13 of the nation's premier racing venues. These tracks include the flagship Daytona International Raceway in Florida, as well as the Chicagoland Speedway and Alabama's Talladega Superspeedway.

This is big business: International Speedway's assets not only bring in gate receipts, but ad revenue, concession sales, merchandise deals and TV broadcasting rights. The only downside is that big races are always sold out -- which leaves little room for growth. But that's a good problem to have, and the company is doing a better job of bringing in revenue during downtimes. The Daytona 500 might only come around once per year, but there will be plenty going on at the racetrack the other 364 days -- from other races to concerts to fireworks displays.

As you might expect, the sluggish economy has cut into leisure spending and dampened attendance at motorsports events. And weaker demand had the company riding the brakes last year -- revenues dropped -11% to $693 million and operating income was cut in half.

But the first quarter of 2010 showed progress on multiple fronts. Earnings for the period modestly ticked up to $0.53 per share, thanks in part to a capacity crowd at the Daytona 500 in February. Furthermore, corporate advertisers are getting back on board and finding NASCAR to be a valuable marketing partner. ISCA has just renewed relationships with several key sponsors and signed up a number of new advertisers as well -- and roughly 85% of the firm's targeted advertising income for the year has already been locked up and sold.

Meanwhile, management is still discounting ticket prices for big races by around 3-5% to get more fans in the seats. But concrete signs of a rebounding labor market can do nothing but help -- payrolls were revised upward in both January and February, and March's addition of 162,000 new jobs was the strongest in several years.

For now, the company is pushing forward with an aggressive stock buyback program and has just reaffirmed its full-year profit outlook. But the shares are still stuck in neutral after falling to the mid-$20s from a prior peak above $50. And since the NASCAR fan base is as rabid and dedicated as ever, I'm betting the current malaise will soon lift -- which makes now an opportune time to shop at this half-off sale.

With 100 major races on the schedule each season and steady recurring revenue from advertising and television rights, International Speedway will weather this downturn just fine.

I expect business to remain sluggish for the near-term, but an investment here is a bet on the future. Once the company is revving its engines again, I think the shares will accelerate and leave today's prices in the dust.

Disclosure: No positions