Six Racetracks Worth Betting On

The Preakness was held this last weekend in Baltimore, Maryland, and is the second part of the Triple Crown. It is thoroughbred racing's most famous series of horse races in the United States, that begins with the Kentucky Derby and ends with the Belmont Stakes in New York.

Horse racing revenues make up a significant portion of the multi-billion dollar gambling industry. By the way, if you want a free horse race handicapping program, go to horsetip.com.

There aren’t many publicly traded horse racetracks left, but there are a few of the purer play stocks which might be worth placing bets on.

Canterbury Park Holding Corp. (ECP) operates year-round pari-mutuel wagering on simulcast and live horse races, along with track concessions and a card club, at the Canterbury Park Racetrack in Minnesota which it owns and operates. The stock has a P/E of 20.5 and recently released its financials. Its latest quarterly earnings, year over year were down over 23%.

Churchill Downs Inc. (CHDN) owns several racetracks, off-track betting facilities, and Churchill Downs Simulcast Productions. Its P/E is 20.5, its PEG is 3.6, and it has a yield of 1%. Latest quarterly revenue growth was up over 32%.

Dover Downs Gaming & Entertainment Inc. (DDE) owns Dover Downs Raceway, a harness racing track with pari-mutuel wagering. The company has a P/E of 17 and pays a yield of 1.3%.

Magna Entertainment Corp. (MECA) owns several horse racetracks and off track facilities. Quarterly earnings year over year was up 11.6% on a 2.4% revenue growth. The stock sells at 80% of book value.

MTR Gaming Group Inc. (MNTG) owns racetracks in West Virginia, Pennsylvania, and Ohio. It has a forward P/E of about 20, and a PEG of 1.3. Its quarterly earnings were down by over 83%.

Penn National Gaming Inc. (PENN) owns racetracks and off-track wagering facilities in Colorado, Illinois, Indiana, Iowa, Louisiana, Maine, Mississippi, Missouri, New Jersey, Ohio, Pennsylvania, West Virginia, and Ontario. Its P/E is 13 and its PEG is 1.6.

Disclosure: The author does not own any of the above.

Comments

[donald oasis:]

I would caution any investor in CHDN or MECA to understand the battle currently raging regarding simulcasting and the fees derived. CHDN and MECA are allies against many other off track wagering enterprises. My guess is that they are losers;however even if I am wrong, this battle will do irreparable harm to the sport and industry.What is hurting the racing industry more than any other factor is their inability to come to any consensus on any issue. saratoga don

2007 May 21 09:55 AM