Five Motorsports Stocks Worth Driving After

Based on television ratings, NASCAR has become the second most popular professional sport in the U.S. after football, and its fans are considered the most brand loyal of all sports. It also receives more advertising from Fortune 500 countries than any other sport.

Speedway Motorsports Inc. (TRK) owns several motorsport racetracks including Atlanta Motor Speedway, Bristol Motor Speedway, Infineon Raceway, Las Vegas Motor Speedway, Lowe’s Motor Speedway, Texas Motor Speedway, and North Carolina Speedway. The stock has a P/E of 16, and a PEG of 2.3. It even pays a small yield of .8%. It recently reported an earnings drop of slightly over 1% on a minimal .7% revenue increase.

Dover Motorsports Inc. (DVD) is a Delaware-based company that owns and operates Dover International Speedway in Dover, Delaware, Gateway International Raceway near St. Louis, Missouri, Memphis Motorsports Park in Memphis, Tennessee, and Nashville Superspeedway near Nashville, Tennessee. Although it is generating negative earnings, it has a forward P/E of 32, and pays a yield of 1.1%. The hedge fund Marathon Partners L.P., founded by Mario D. Cibelli, owns 500,000 shares of the company, and has written a letter to the Board of Directors urging them to sell the company.

The Daytona Beach, Florida company, International Speedway Corp. (ISCA), owns and operates several motorsports racetracks in Florida, Alabama, Arizona, California, Kansas, Michigan, New York, South Carolina, and Virginia. The stock has a P/E of 25.7, and a PEG of 2.2. It just increased its annual dividend by 25% which it has paid for 34 consecutive years. The company just had its credit ratings increased from BBB- to BBB by Standard & Poor’s.

A very low market capitalization, and therefore highly speculative stock, DIRT MotorSports, Inc. (DMSP.OB), operates several dirt motorsports tracks in New York, Florida, and Pennsylvania. In spite of the fact that its revenues were up over 22%, its earnings and cash flow, are negative.

Another low cap stock, Interactive Motorsports & Entertainment Corp. [IMTS.OB] owns and operates NASCAR Silicon Motor Speedway racing centers. Its earnings and cash flow are negative. A third microcap, American Racing Capital, Inc. [ANRC.OB], designs and purchases motor sports racetracks. Negative earnings and negative cash flow.

To round out the microcaps, there is Dale Jarrett Racing Adventure Inc. [DJRT.OB], which provides raceway type driving schools for individuals and corporations. It has negative earnings.

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

Comments

[Paul Meisel:]

ISCA and TRK are clearly best of breed, controlled by the France family and Bruton Smith, respectively.

Disclosure: I own neither but am a long time customer.

2007 Jun 05 08:39 AM

[jvan79:]

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2007 Aug 10 11:35 PM

[Race Equipm...:]

any updates hows TRK faring now with its stock earnings?

thanks.

Jun 11 11:36 AM