Yes, international Speedway is still trading and it’s one of the best places to be if you want to invest in a long-term stock market play. Management has a proven track record of increasing shareholder value so if you have a longer time horizon and want to ride the trend, you could do a lot worse than place a long stock position in this company.
If you want to get right to the point, let’s discuss the company’s history. Founded in 1911 in London, England, Speedway‘s first track was Speedway, England. Over the next few decades, the company built up a presence in Europe and then the rest of the world as European competitions were expanded to include other countries. In the 1950s and ’60s, the company became one of the world’s leading producers of stock cars and their famous oval track is still very popular today. One of the longest-running sports franchises in North America, the Indianapolis Motor Speedway, is owned and operated by Speedway and they host some of the world’s biggest automobile races. We won’t bore you with the company’s germane sordid history, if you want to know more, do your own research.
Present And Future
Now that we have the company’s history out of the way, let’s discuss the present and future of Speedway. First, take a look at the top-line numbers for the company. Management teams have a tendency to revalue their companies in the wake of a major event or period of growth. Since the beginning of 2019, Speedway‘s stock price has more than doubled due to a combination of factors, including a rise in automation in its steel mills, a doubling of overseas orders, and good operating performance at its steel mills. Its shares now trade for around 13 times earnings per share and sales prices have more than doubled to 38.5 times earnings. Things can’t stay perfect forever though and the company’s profits could decline if the world’s automotive demand slumps. But then again, maybe not. Businesses worth over $10 billion typically generate around $20 billion in annual revenue so maybe this company is priced right and has a great shot at future growth.
The final topic we’ll cover is valuation and most equities, in general, trade for a lot less than they’re worth. The key to long-term profitability and growth is making smart investments at the right price so a cheap stock price doesn’t mean the company is without value. When we look at the revenue the company generates, it’s clear that Speedway is a sound investment. However, investors should also keep in mind that the stock price has already risen substantially from the low-double digits it was trading at just a year ago. Given its strong growth and demand for its products, it may not be the best time to buy shares of Speedway. The demand is certainly there but perhaps not at the current share price.
To be fair, the automobile industry as a whole has had a pretty good year so far. Sales are up, profits are up, and the stock prices of leading stock car manufacturers have more than doubled. Things could still take a turn for the worse if the economic environment becomes more uncertain as the world grapples with the pandemic. But until then, let’s enjoy the runt the industry is on because it’s still a great place to be for long-term investing.