Dmitry Balyasny’s Balyasny Asset Management disclosed today a 45% increase in its exposure to Churchill Downs, Inc. (NASDAQ:CHDN). According to a Schedule 13G form filed with the SEC, the fund now beneficially owns an aggregate of 909,724 shares of the company’s Common Stock, which represent more than 5.2% of its total shares outstanding.
Balyasny Asset Management is a hedge fund founded by Dmitry Balyasny in 2001, and run by him ever since. It specializes in macro investing, with a focus on “misunderstood situations,” according to Mr. Balyasny himself. It currently holds a highly diversified equity portfolio worth more than $8.8 billion, with a slight focus on financial, energy, information technology and consumer discretionary stocks.
Churchill Downs, Inc. (NASDAQ:CHDN) is a $1.64 billion market cap diversified provider of pari-mutuel horseracing, casino gaming, entertainment, and is the country’s source of online account wagering on horseracing events. It offers gaming, video poker, slot and table games, and video lotteries. Balyasny Asset Management’s purchase took place on the same date as the company decided to add a –job- position dedicated to improving its image in the racing industry, as plenty of bad publicity has arisen surrounding the company this year.
Despite this “bad publicity” (if such thing really exists) Churchill Downs, Inc. (NASDAQ:CHDN) has returned about 5% year-to-date, outperforming the S&P 500 Index, and the NASDAQ Composite Index.
Other major institutional investors betting on Churchill Downs, Inc. (NASDAQ:CHDN) are Paul Reeder and Edward Shapiro’s Par Capital Management, Mario Gabelli’s GAMCO Investors, and George Soros’ Soros Fund Management. These funds last disclosed (by the end of the second quarter o 2014) ownership of 1.28 million shares, 902,276 shares, and 704,839 shares, respectively. Another institutional investor that seems bullish about this casinos and gaming company is Matthew Sidman’s Three Bays Capital, who recently revealed a 5.3% passive stake in the company, with almost 921,900 shares.
Opposite to these funds, two insiders at Churchill Downs, Inc. (NASDAQ:CHDN) have been selling their stock lately. Robert L. Evans, Chairman and Chief Executive Officer, sold more than 48,000 shares since the end of the second quarter, while William E. Mudd, Executive Vice President and Chief Financial Officer, disposed of more than 10,500 shares in early-September.
Despite this bearishness, trailing Balyasny Asset Management’s moves is clearly not a bad idea. The fund ended 2013 with double digit positive returns in all three of its strategies, according to an investor letter of theirs. Atlas Global returned 13.11%, the AEF fund, 21.14%, and the AIF fund, 15.14%.
Disclosure: Javier Hasse holds no positions in any stocks or funds mentioned
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