And, more good news: we, as investors, can be rational and take advantage of Market mis-pricing to profit so long as our fundamental analysis is correct (buy quality businesses cheap, sell them dear).
Yes, some investors threw in the towel on weaker than expected June quarter results (we discussed here) and the subsequent downgrade by Brean Murray, one of the few brokerage firms that has long covered the stock and knows both the company and industry well. We are aware of key investor concerns such as (1) increased competition from an aggressive Churchill Downs (CHDN, $37.86), (2) lower wagering yields (related primarily to new content), and (3) the poor economy.
- Through the track's 30th program Aug. 30, Del Mar was averaging 17,560 patrons a day with an on-track handle of $2,281,188 in 2009. Compared to last year's figures, when the track was running six days a week instead of the current five-day schedule, the on-track attendance jumped 12.4% from the 2008 average of 17,560 [per day] at the completion of six weeks. The on-track average handle for 2008, $2,076,270, was 9.9% lower.
- This year's attendance figure, 526,551, is up by 2.7% over last year (512,941) when Mondays are eliminated. The current-year handle, $68,228,273, is a 1.4% increase over last year's $67,276,836, under the same scenario.
- Youbet offered by Market at 9% TTM FCF yield
- Blue Nile (NILE, $54.92) offered at 3% yield
- The Knot (KNOT, $9.90) at 4% yield
- Stamps.com (STMP, $9.05) at 6% yield
- Churchill Downs at 4% yield
- Penn National Gaming (PENN, $27.39) at 6% yield
Disclosure: long UBET, BIDZ.
© 2009 Jeffrey Walkenhorst
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