|Written by GSCR Staff|
|Wednesday, 25 March 2015 05:40|
Anyone who reads our stuff regularly knows we here at GSCR are confirmed sports nuts.
As we mentioned in the Goldman Guide this week bracket mania has begun, which kicks off a great 6 weeks or so in sports starting with NCAA March Madness, the start of MLB, The Masters, and capped off on the first Saturday in May with the Run for the Roses, the Kentucky Derby.
Anyone who follows sports and stocks might have seen a story that caught our eye the other day. What was once an American sports icon, Louisville Slugger, was sold for $70 million to Wilson Sporting Goods, which is now a division of Helsinki based American Sports Corporation. The bats will still be made in the U.S. but the Company is no longer American owned. A sad day or a sign of the times for baseball?
Speaking of hits, two of our featured sports related stocks have done quite well lately. Last month’s 30-30 pick, Sportsman’s Warehouse Holdings. Inc. (NASDAQ – SPWH), is up over 10% in a month. Spring sales should help the Company. Also Calloway Golf Company (NYSE – ELY) is a stock we have featured many times and has bounced back nicely over the last three months with a 30% pop. The Masters viewership should help sales as Tiger Woods is supposed to return.
Our pick today is geared toward the Kentucky Derby finale of the greatest six weeks in sports. Below is a six month chart for Canterbury Park Holding Corporation (NASDAQ – CPHC - $10.40) which illustrates a general upward trend in price since a relative low in early autumn last year. Additionally, the stock is now trading over the 50-day EMA, also shown below.
CPHC 6 Month Chart, 50-day EMA
The Company owns and operates Canterbury Park Racetrack and Card Casino, Minnesota’s only thoroughbred and quarter horse racing facility. Canterbury Park’s Card Casino hosts card games 24 hours a day, seven days a week, offering both poker and table games. In addition, the Company conducts year-round wagering on simulcast horse racing and hosts a variety of other entertainment and special events at its facility in Shakopee, Minnesota.
Another solid technical metric for CPCH is the RSI which indicates a very bullish signal at 54, just breaking through neutral. Additionally, a short float of just below 1% is great sign that there are not many doubters out there on the short side. The Company is operating in the green with nearly $10 million of cash on hand and no debt as of December 31. Finally, a low 6.2 Enterprise Value/EBITDA ratio illustrates a ‘cheap’ buying opportunity for both an investor and an acquirer.
We think CPHC can ride a momentum wave and pop 10-15% over the next two or three months.
Have a great day!
Disclosure: Goldman Small Cap Research analysts are neither long nor short these shares but may elect to purchase the stock within the next 48 hours.
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