Churchill Downs - Aggressive Growth


Churchill Downs ( CHDN ) is a Zacks #1 Rank (Strong Buy) due to four straight positive earnings surprises and rising estimates. Derby day is May 5, 2012 and getting in ahead of the other horses could help you get to the finish line first.

Company Description

Churchill Downs Incorporated provides pari-mutuel horseracing content for consumers and businesses. It offers gaming products through its casino operations in Mississippi, and its slot and video poker operations in Louisiana and Florida. CHDN also owns several casinos. Churchill Downs Incorporated was founded in 1928 and is headquartered in Louisville, Kentucky.

CHDN Tops Expectations in Last Four Quarters

CHDN has beaten the Zacks Consensus Estimate in each of the last four quarters. Over the course of those four beats, Wall Street has rewarded shareholder each time with a higher stock price following the beat.

The biggest increase came after the September 2011 quarter when the company earned $1.16 per share. That was $0.85 ahead of the Zacks Consensus Estimate or a beat of approximately 275%. The stock moved 14% after the huge beat.

CHDN Recently Reported Earnings

On March 12, 2012 the company reported revenue of $149 million roughly $2 million less than the Zacks Consensus Estimate but higher than the $137 million reported in the year ago period. EPS of $0.25 was $0.33 ahead of the estimate or a 412% beat. As a result the stock moved higher by 8.3%.

Earnings Estimates Bumped Up

Following the most recent earnings report, analysts bumped up their earnings estimates for 2012. The Zacks Consensus Estimate for 2012 EPS moved from $2.85 in February 2012 to the current level of $3.02. 2013 estimates also moved higher from the $3.30 level reached in February 2012 to the current level of $3.40.


CHDN rides with some reasonable valuation metrics in comparison the industry average. With a 16x trailing twelve month PE, CHDN is trading at a discount the 24x industry average. The forward PE of 19x is also a discount, but not as steep, to the 22x industry average. Price to book shows a slight premium for shares of CHDN while price to book carries a slight discount to the industry average.

The Chart

A quick look at the price and consensus chart shows that analysts have been on the money when following CHDN. Of late, the estimates have risen faster than the stock but if history comes even close to repeating itself; the stock price is poised for a charge. Aggressive stock investors will like the increased earnings, the history of solid surprises and very reasonable valuation. CHDN is a Zacks #1 Rank (Strong Buy).

Churchill Downs - ticker CHDN> <P ALIGN=

Brian Bolan is the Aggressive Growth Stock Strategist for He is also the Editor in charge of the Zacks Home Run Investor service

CHURCHILL DOWNS ( CHDN ): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Investing Ideas , Stocks

Referenced Stocks: CHDN

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