THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Sunday, September 10, 1995 TAG: 9509090265
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY BOB ZELLER, STAFF WRITER
LENGTH: Long : 136 lines
The market is full of winners this year, but one of the biggest is a little-known stock that has been around for more than 30 years.
If, back in January, your crystal ball had said buy International Speedway Corp., your investment would have lapped the field several times over. The share price for ISC, which operates four high-profile motorsports tracks, has jumped from $103 1/2 to $208 in the past eight months.
That's quite a leap, considering ISC's stock sold for 50 cents a share 25 years ago.
``It's just amazed me,'' said Sam Nelson, a broker at Morgan Keegan in Birmingham, Ala., who has handled ISC stock for more than 30 years. ``I can't believe it. Call Bill France. He can't believe it.''
France is chairman of ISC and president of NASCAR, the governing body for the nation's stock-car racing circuits. While France loves talking NASCAR, he is less talkative about ISC stock.
``It's gone up,'' which is about all he would say.
About 60 percent of the 2,289,248 shares of ISC stock - or roughly 1.37 million shares - is controlled by the France family. That means the value of Frances' ISC stock, at least on paper, is up more than $140 million this year.
ISC's rise has coincided with the impressive growth of NASCAR itself, which has received unprecedented exposure recently. In July, NASCAR was the cover story on issues of Forbes and Sports Illustrated.
The Sports Illustrated headline proclaimed NASCAR as ``America's Hottest Sport.'' One reason, the Forbes article noted, is that NASCAR's attendance-growth rate of 9 percent is the highest in professional sports.
Many races sell out months in advance, and NASCAR's television profile has soared. CBS carries four races and ABC two, while three cable networks (ESPN, TBS and the Nashville Network) wrestle for the remaining 26 broadcasts.
Despite it's rocketing value, ISC does not cause much traffic on Wall Street.
``Sometimes the stock won't trade for several days,'' Nelson said. ``A lot of people who've got it are not interested in selling what they've got.''
In fact, not a single share was traded last week. The last significant transaction was on Aug. 31, when 1,100 shares changed hands.
The stock is even cooler among Virginia traders. A spokesperson for the Scott & Stringfellow brokerage firm headquartered in Richmond said the company had handled just one ISC transaction all year. ISC trades over-the-counter under the NASDAQ symbol ISWY.
``We don't have very much to be traded,'' France said, ``and the low amount creates more volatility.''
The France family's ISC owns or controls the tracks at Daytona, Fla., Talladega, Ala., Watkins Glen, N.Y., and Darlington, S.C. Other than the steady growth in NASCAR itself, France offers no inside explanation for ISC's performance.
``I'm not a stock market expert,'' he said. ``We're in the racing business.''
Nelson, however, is a stock expert, particularly ISC stock. Nelson is known as a ``market maker'' for ISC, which means he specializes in trading it.
``Back in the '60s, when I first started foolin' with it,'' Nelson said, ``it was about 2 or 2 1/2 a share. We got involved when they started building that track at Talladega. Some folks jumped on it and ran it all the way up to 6 or 7.
``Then this track out there just about broke 'em. The stock came right on down - lowered that glide path down to the level of a manhole cover. It was about 50 cents. And then gradually it rose.''
In the late '70s, Nelson bought some stock from a customer at about $7 a share. The man was delighted because he had bought it at about $3. By the 1980s, ISC stock was in the 20s.
``I thought people buying it for 20-25 were out of their ever-lovin' minds,'' Nelson said. ``Shows you how smart I am.''
Nelson, by the way, has no interest in auto racing. He's never seen a NASCAR race and doesn't follow the sport.
``Closest I ever come to an auto race was I almost got run over by a race car in the 1950s,'' he said. ``I was at the state fairgrounds, walking outside the track by the hog barns and this thing came through the old wooden fence and almost killed me. It was an old jalopy. Ran through the fence. Almost ran me over.''
ISC is not NASCAR's only presence on Wall Street. In fact, in a highly publicized ceremony at the New York Stock Exchange last February, Speedway Motorsports Inc. went public and 21-year-old David Smith bought the first share.
Smith is the son of Charlotte businessman Bruton Smith, whose company owns the tracks in Charlotte and Atlanta, parts of tracks in North Wilkesboro, N.C., and Rockingham N.C., and is building a new track in Texas.
Speedway Motorsports stock made a gradual rise from its opening price of $18 to share and is now hovering around $25, but its performance has been nothing like ISC's.
``They complement one another,'' Nelson said. ``I think what caused a lot of interest in International Speedway was that people previously hadn't known about it, but when the track in North Carolina went public, they looked around and said, `What other tracks are there?' ''
Kevin Daly, an analyst with Hoefer & Arnett in San Francisco who also follows ISC closely, believes a big reason for the success of its stock is the lack of competition.
``Who's going to put up a race track next to you in Daytona?'' Daly said. ``If you want to go to a stock car race in northern Florida, or in Talladega, you're stuck. Period.''
Daly also said ISC's Daytona USA themepark, which will be adjacent to the track complex and is scheduled to open next summer, likely has helped the stock.
Other than the Frances, what kind of people own ISC stock?
``There are two basic groups,'' said Bo Martin, another Morgan Keegan broker who says he has been dealing with ISC for three to four years. ``One group has little dips and dabs, odd lots, less than 100 shares. Some of them have had it from way back, when it was 20 bucks or below.
``Then you have some money managers and public funds who have very large positions, maybe 20,000 shares. They do some trading back and forth.
``It's been an amazing creature. Most people think it'll keep going. They haven't said no yet.''
Nelson thinks the stability of the company, and France's strong controlling hand, are the reasons for ISC's tremendous growth.
``I tell you, the folks that run that thing are smart people,'' he said.
``Any business where you've got a man people can depend on all the way around - it's going to be successful.''
Is there a downside to buying ISC stock?
``Sure,'' Nelson said. ``There's a downside to buying anything. No tree grows to the sky.
``There's a saturation point on everything, but if you're asking me where (ISC's) is, I don't know. I didn't predict it's growth, so I sure don't know when it's gonna end.''
Daly also can't find many legitimate caution signals.
``Let's see . . . the stock price is getting up there a bit,'' he said. ``It might be a little ahead of itself.
``And there's the thing about snoking now, and Winston is one of (NASCAR's) biggest sponsors. But if Winston had to pull out for regulatory purposes, there'd probably be about 200 sponsors lining up to get in. Will the popularity of stock-car racing keep going forward? Is it a fad or is it for real? Well, history tells you it's for real.'' ILLUSTRATION: Graphic
ISC PRICES FOR 1995
Source: Morgan Keegan brokerage firm
[For complete graphic, please see microfilm]
by CNB