A New Pick for the Small-Cap Superstars Portfolio
We add another stock held by several of our favorite small-cap managers.
As we discussed in our first article, Morningstar's Small-Cap Superstars Portfolio, one of the best and easiest ways to screen for new investment ideas is by monitoring the activity and holdings of successful fund managers. In this portfolio, we aim to combine some of the best ideas from our favorite small-cap fund managers with the highest-rated stocks of our fellow analysts here at Morningstar. (For breaking news and updates on our Small-Cap Superstars Portfolio, be sure to sign up for our free e-mail alerts.)
After running our screens and analyzing the respective merits of our favorite managers' holdings, we've decided to add International Speedway (ISCA) to our portfolio. International Speedway is a leading promoter of motor sports in the U.S., with 12 tracks, including the renowned Daytona International Speedway. The company's management team mostly consists of the France family, which has direct ties to Nascar, the governing body of the most well-known racing circuits. Morningstar analyst Joel Bloomer believes the family's ties to Nascar ensure a steady stream of high-profile stock car races at its tracks.
With an extremely loyal fan base and lucrative long-term television contracts, we think that Nascar and hence International Speedway have excellent long-term prospects. At its recent price of about $44 per share, International Speedway is trading at an attractive valuation relative to Bloomer's $63 fair value estimate.
Small Cap Superstars has a position in the following securities mentioned above: ISCA. Find out about Morningstar’s editorial policies.