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International Speedway (ISCA) Could Hold Up in a Slowing Economy -Barron's

February 11, 2008 9:17 AM EST
This weekend's edition of Barron's highlighted the possibility of a turnaround in shares of International Speedway (Nasdaq: ISCA) during an economic slowdown. The article questions whether a slowing U.S. economy will keep Nascar fans at home this year.

The article argues that highly visible earnings, in addition to several other factors, could boost the Company during an economic downturn, possibly reversing a downward trend: shares of International Speedway are down about 22% since last summer and haven't been trading at current levels (~$40) since 2003. Quoted in the article, International Speedway's COO, John Saunders, points out that 75% of the Company's earnings are already contracted as the Company has recently signed long-term broadcasting contracts with ABC/ESPN and Fox Sports.

Barron's says the "biggest issue" in regards to International Speedway's performance is whether or not Nascar's TV ratings can hold up during a tightening economy. If ratings decline, corporate sponsorship won't get renewed with a 10% price increase as they have experienced in the past. If this is the case, however, Barron's says sponsors are "not showing it." Last year, International Speedway signed a 10-year deal with Coca-Cola (NYSE: KO) and Kroger (NYSE: KR) launched the largest consumer promotion in U.S. sports history, based on International Speedway events.

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