With the Kentucky Derby this weekend, we thought we’d take a look at the returns for Churchill Downs (CHDN) around the track’s iconic event. (Yes, Churchill Downs is a public company.) While the broad market may follow a “sell in May, go away” pattern with lower than average returns between May and October, CHDN is the opposite. From the start of the year through the running of the Derby on the first Saturday each May, CHDN has a sub-par median return of 0.76% since its IPO in 1993. But returns are better than double that from the running of the Derby through the end of the year, with +5.9% returns on average and +10.18% median; positive returns go from little better than a coin flip pre-Derby to 65% of the time post-Derby.
The week before the Derby (which we just saw) delivers average returns of 1.77%, while the week after is typically a buying opportunity for the second half rally, delivering 0.34% returns on average with a median of zero and worse than a coin flip in terms of win percentage. Below we table up the historic returns for Churchill Downs around the Derby, which we’ll be watching this weekend with a mint julep in hand.
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