DKNG - Churchill Downs: Making A Wager On This Proven Compounder

2024-04-28 07:33:52 ET

Summary

• Churchill Downs, owner of the iconic Kentucky Derby, is a diversified gaming operator with a strong historical record.
• The company has best in class operating margins, ROE, ROC and has exhibited consistent revenue and net income growth over the past 14 years.
• Despite a 3-year period of consolidation, the stock is undervalued and presents a good opportunity for long-term investors.

Summary

Churchill Downs (CHDN), owner of the iconic Kentucky Derby, is a diversified gaming operator with a strong historical record. Over the past 3 years, the stock has consolidated while revenue and net income has grown. This has presented investors with a great opportunity to purchase a long-term compounder at a fair price.

Background and History

Churchill Downs is a gaming company, most famously known for hosting the Kentucky Derby—one of the most iconic horse racing events in the world that has been ongoing since 1875 . In fact, the next Kentucky Derby, to be held on May 3 ^rd and 4 ^th 2024, will be the 150 ^th edition of the race: a huge milestone. What started as a single racetrack in Louisville in 1875 eventually morphed into a holding company of 7 racetracks in 1928 known as the American Turf Association. In 1950, the American Turf Association dissolved and distributed CHDN stock to shareholders of the American Turf Association....

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