CHDN as a short?

[Valuist]

I look at Churchill Downs as a solid candidate to short. The stock has had a very good (unwarranted?) run this year and technically has been strong. Maybe too strong. Looks over extended from its 50 and 200 DMAs.

Fundamentally, I don't care what the PE is or what they earned last quarter. Its all about what they will do going forward and I see problems.

1. The last two years, the meet has gotten juiced by hosting the 2 day Breeders Cup. When you only run 20 days or so and two of them are BC days, the handle, attendance and general interest will be down considerably with no BC this year.

2. The shift of horseman to New York. Sure, guys like Romans, McPeek, Asmussen and others often had divisions in NY but now those divisions are bigger. The result is smaller fields of lesser quality. The spring meet was the worst Churchill meet I've seen since I started playing the KY tracks in the mid 90s.

3. Two of their days in the fall meet have been designated "stars of tomorrow" days. These are days made up exclusively of 2 year old racing. These two days happen to be Saturdays during their meet. As a racing fan, I like them as it gives a lot of unraced and lightly raced horses some form to go on. As a bettor, I will not play them. When you mix the bulk of horses who've run at Kee, AP and TP along with first time starters, its complete, total guesswork. The payoffs will be big, but you might as well blindly pick numbers.

The stock is thinly traded. There is some, but not too much, short interest in the stock (about 5%).

[lamboguy]

they own Twinspires.com and i am told their business has gone way up. they have a few casino's that are doing great now, and if internet poker is legalized, they think they will get a big share of that as they are prepared to run a poker site the very day it gets legalized.

the only problem i see to the poker is that if Romney gets elected. he is supposedly against expanded gambling and he biggest contributor is Sheldon Addleson, the CEO of Sands Casino. if Romney bends on his gambling stance, i am sure Sheldon is going to be looking for some consideration. he gave him over $10 million to run for president so far.

there figures to be pitfalls that are infront of us that have to do with discretionary income. i would say that going forward its going to be a whole lot tougher to fill up these oversaturated casino's. its the law of diminishing returns. at some point that will take effect in the gambling business.

fundamentally i would say you are on the right path when you say short. there might be some better short candidates in the industry to go after though that i am unaware of yet.

[Valuist]

they own Twinspires.com and i am told their business has gone way up. they have a few casino's that are doing great now, and if internet poker is legalized, they think they will get a big share of that as they are prepared to run a poker site the very day it gets legalized.

the only problem i see to the poker is that if Romney gets elected. he is supposedly against expanded gambling and he biggest contributor is Sheldon Addleson, the CEO of Sands Casino. if Romney bends on his gambling stance, i am sure Sheldon is going to be looking for some consideration. he gave him over $10 million to run for president so far.

there figures to be pitfalls that are infront of us that have to do with discretionary income. i would say that going forward its going to be a whole lot tougher to fill up these oversaturated casino's. its the law of diminishing returns. at some point that will take effect in the gambling business.

fundamentally i would say you are on the right path when you say short. there might be some better short candidates in the industry to go after though that i am unaware of yet.

Good point about Adelson.

I also think Arlington is in a degree of trouble. Just deteriorating product and lack of interest. Poly has had a bad effect on their product.

[lamboguy]

Good point about Adelson.

I also think Arlington is in a degree of trouble. Just deteriorating product and lack of interest. Poly has had a bad effect on their product.
the funny thing about Adelson is that he was one of the first big super-donor's to his campaign. after the debate they got plenty of those type of people lined up trying to hand him money. people tend to be front runners. i never liked Adelson since he had GWV Travel but i got to give him credit on this one, he took his shot before anyone else did and now i am sure if he wins he is going to score.

[Valuist]

the funny thing about Adelson is that he was one of the first big super-donor's to his campaign. after the debate they got plenty of those type of people lined up trying to hand him money. people tend to be front runners. i never liked Adelson since he had GWV Travel but i got to give him credit on this one, he took his shot before anyone else did and now i am sure if he wins he is going to score.

Speaking of Adelson, LVS may be worth following. A guy was on some show claiming they may convert to a REIT. Their Vegas revenues now are completely dwarfed by Macau.

[lamboguy]

Speaking of Adelson, LVS may be worth following. A guy was on some show claiming they may convert to a REIT. Their Vegas revenues now are completely dwarfed by Macau.i wouldn't short the sands if i were you. i know this man for almost 40 years, if there is a way to the money he is going to find it.

[Valuist]

i wouldn't short the sands if i were you. i know this man for almost 40 years, if there is a way to the money he is going to find it.

I wasn't thinking of shorting LVS, I was thinking of buying stock in them.

[lamboguy]

I wasn't thinking of shorting LVS, I was thinking of buying stock in them.
i'm sorry, that's better

[ThinkingAlways]

I look at Churchill Downs as a solid candidate to short. The stock has had a very good (unwarranted?) run this year and technically has been strong. Maybe too strong. Looks over extended from its 50 and 200 DMAs.

Fundamentally, I don't care what the PE is or what they earned last quarter. Its all about what they will do going forward and I see problems.

1. The last two years, the meet has gotten juiced by hosting the 2 day Breeders Cup. When you only run 20 days or so and two of them are BC days, the handle, attendance and general interest will be down considerably with no BC this year.

2. The shift of horseman to New York. Sure, guys like Romans, McPeek, Asmussen and others often had divisions in NY but now those divisions are bigger. The result is smaller fields of lesser quality. The spring meet was the worst Churchill meet I've seen since I started playing the KY tracks in the mid 90s.

3. Two of their days in the fall meet have been designated "stars of tomorrow" days. These are days made up exclusively of 2 year old racing. These two days happen to be Saturdays during their meet. As a racing fan, I like them as it gives a lot of unraced and lightly raced horses some form to go on. As a bettor, I will not play them. When you mix the bulk of horses who've run at Kee, AP and TP along with first time starters, its complete, total guesswork. The payoffs will be big, but you might as well blindly pick numbers.

The stock is thinly traded. There is some, but not too much, short interest in the stock (about 5%).

CHDN might be a good candidate for a short but not for the reasons you suggest.

1) Churchill makes very little net money from the Breeders' Cup. Churchill gets very little of the handle and not a lot of the tickets. All other things being equal (and they are not), Churchill would see an increase in parimutuel handle when BC is not in town.

2) Might be true but you aren't the first person to think of this. It should already be reflected in the stock price.

3) Churchill has been running two stars of tomorrow days during their fall meet for years. How is this year any different?

Again, I'm not saying shorting is a good or a bad thing. Just that your reasons don't support shorting.

[Valuist]

CHDN might be a good candidate for a short but not for the reasons you suggest.

1) Churchill makes very little net money from the Breeders' Cup. Churchill gets very little of the handle and not a lot of the tickets. All other things being equal (and they are not), Churchill would see an increase in parimutuel handle when BC is not in town.

2) Might be true but you aren't the first person to think of this. It should already be reflected in the stock price.

3) Churchill has been running two stars of tomorrow days during their fall meet for years. How is this year any different?

Again, I'm not saying shorting is a good or a bad thing. Just that your reasons don't support shorting.

Churchill maybe doesn't get a lot from the actual BC races but what about the undercard races? They would have to get the handle on those, and with the BC sized crowds they get, what would the handle be for those races if they were held on a non-BC Friday or Saturday? Maybe 1/20th?

Secondly, based on the price action, I don't think there's much negative news priced into CHDN.

[Valuist]

Rough past few days for the folks at CHDN. Stock traded over $67 as recently as November 2, but following an earnings miss and a big down day for the market, its trading with a 60 handle.

[Valuist]

CHDN has already badly broken the 50 DMA trendline and is dropping down against the 200 DMA support level. It hasn't dropped below the 200 day moving avg since Sept 2011.

[lamboguy]

I just noticed that Churchill just got their license in Warren County, Ohio for a racino yesterday. it looks like they sold the news. downside volume on the stock looks to be drying up right now, there should be a decent bounce between here and $55 which could get the stock back to $61, the next time it drops it will fall below $50.