Canterbury Park Holding Corpora (CPHC) research, news, and more from GeoInvesting

Company description

Tue, 16 Sep 2025 16:19:59 GMT

Canterbury Park Holding Corp is in the business of pari-mutuel wagering on horse races and unbanked card games at its canterbury park racetrack and card casino facility in Minnesota. The company has four operating segments. The horse racing segment represents pari-mutuel wagering operations on simulcast and lives horse races; the Card Casino segment represents unbanked card operations; the food and beverage segment includes concessions, catering, and events services provided at the Racetrack; and the development segment represents its real estate development operations. The firm generates a majority of its revenue from the Card Casino segment.

Reasons For Tracking

Mon, 13 Jun 2022 04:00:00 GMT

What’s one of the first words that comes to your mind when you hear the word “casino?”

If you said “bankruptcy”, we’d venture to say that you were in the majority. If you said craps, betting or slots, you might have a gambling problem. Yeah, yeah, we’re just kidding. But after all, we assume that since you are reading this, you do invest…and that can be a bit of a gamble in and of itself.

Of course, we’d prefer you NOT take a gamble on the sketchy investments. You know, the slots of stocks, pump and dumps, targets of promotion, TikTok stars, or whatever the flavor of the day might be on platforms like Stocktwits.

That’s why we are here, to cull out this noise for you.

Anyways, there’s a reason we brought up the casino theme here. We think we found a company operating in that very industry that is not like the rest. The ‘rest’ can mostly be summed up with that one word, bankruptcy, that we’d associate with the plight of the damned, like The Atlantic Club, Showboat Casino, Revel, Trump Plaza, Atlantis, and Sands, whose journeys are succinctly summed up nicely in this article, Failed Atlantic City Casinos . And yes, that is just Atlantic City.

While we won’t go into the various reasons why these casinos failed, we can say that we believe we’ve found a small anomaly of a company that is at least ripe for analysis. It’s in a profitable microcap company named Canterbury Park Holding Corporation (NASDAQ:CPHC) which engages in horse racing, card casino, food and beverage, and real estate development. It is domiciled in Shakopee, Minnesota and was founded in 1994. Our goal here is to figure out if we can justify looking at a casino stock, especially if we are going into hard economic times . On the surface, we like the way a potential bullish thesis could play out based on the company’s clean balance sheet and untapped revenue potential of its casino.

We’ve already covered the stock in a few portal notes, recently highlighting its breakthrough 2021 financial performance which has already bled through to the first quarter of 2021.

Please note that even though it appears that, based on Q1 2022 revenue, there are tough comps for the remainder of the year, a predictable seasonality appears to be the norm for the company. More specifically, ignoring 2020/2021 due to COVID-19, Q1 has been the lowest financial outing, followed by Q4, while Q2 is the company’s strongest quarter. Based on the data, we can extrapolate that the company will report 2022 revenues of $70 million and EPS of $1.82. This compares to revenue of $59 million in 2021 and EPS of $1.18. Applying a P/E of 15x on 2021’s earnings potential equates to a potential price target of $27.30.

So what’s the magic bullet here? Some might argue that we are already in a downward economic cycle, so what would make for the company’s 2021 a standout performance, and do people believe it is sustainable?

The chart below might give some indication of how people really feel about the sustainability of the company’s momentum.

May 16, 2022, the day of the company’s last quarterly report, marked the beginning of a steep 3-day 27% decline to $20.50 from $28.40, settling at an even steeper decline of 37.2% from its April 27, 2022 high water mark of $32.92. Prior to an upward spike of 50%, also evident below, we pegged the company as a research target at a price of $19.27 on March 20, 2022, the same day we were able to have a talk with company management.

Regrettably, we did not take part in the stock’s big move upward, but now that shares have fully retracted, we are wondering if we are being presented with a second chance. Especially now that we potentially have a defined price target to reference.

So, we will continue to monitor the company, since, as explained below, there seems to be some untapped potential.

To get answers to the questions posed, you have to figure out if the company is uniquely positioning itself through diversification. They would say yes, that they stand to reap a downstream advantage from contracts with developers to build out underdeveloped real estate, whether it be in restaurants, hotels, apartments, or houses, all of which have the potential to improve the traffic to its casino services.

They are also entering into joint ventures/partnerships with these developers and will share in some of the revenue from those activities. The company is also a unique casino stock in that it has no debt, yet has the lowest valuation among most of its peers. For example, take a look (paying particular attention to its microcap counterparts) at how CPCH’s income statement and balance sheet compares with its peers:

Source: Company reports

Basically, the underdeveloped real estate owned by CPHC serves as a canvas from which they can strategize with their partners in various ways.

A Public Presentation, But Just How Public Is It?

Now, we’ve been graced with a presentation released in June 2022 from the company’s 2021 Annual Shareholder Meeting that we are not sure has been fully digested by the public. Keep in mind, this is a post-earnings investor presentation complete with some financeils specific to certain segments of its operations and a business update highlighting its stated growth drivers and various projects that shed light on exactly how it plans to increase its footprint.

Not only is it helpful, but it transforms what they’ve been talking about into a visual representation that anyone can understand and appreciate when it comes to the ventures. As a matter of fact, we are not sure if they’ve ever put out a presentation like this that so completely lays out how they plan to increase shareholder value.

So, speaking of that diversification, here are some updates that CPHC leaves us to ponder (Source: Slide 20).

Card Casino

63 total tables operating 24 / 7
Table games include Blackjack, Mississippi Stud, EZ‐Baccarat, Three Card Poker, Face Up Pai Gow Poker, Ultimate Texas Hold’em
Poker games include Texas Hold’em, Omaha Hi‐Lo, Seven Card Stud
Known for friendly dealers and comfortable environment
TTM revenue of $41.6 million*

Real Estate Development

327 acres on‐site, including 40 acres available for future development
Initial development underway
- Triple Crown Apartments initial occupancy in June 2020; second phase under construction
- Greystone offices complete; under construction on TE Miller senior apartments
- Land sales to Pulte / Lifestyle under construction

Racing

Live racing May to September
Year‐round race simulcasting
Annual attendance of nearly 500,000
Average daily attendance on live racing dates exceeds 6,500 guests
SMSC Purse Enhancement Agreement drives competitive purses and facility marketing

Hospitality

Chips Express operates 24/7
Other Card Casino eateries include full‐ service bar
Triple Crown Club offers lounge services and buffet restaurant
25 total concession stands available on live racing days
More than 85,000 square feet of flex space for trade shows, conferences, meetings and galas
Facility hosts 35‐40 events per year

A bird’s eye view gives you the breadth of the company’s ambitious plans (Source: Slide 10), the specifics of which can be found on accompanying slides.

As part of its investment highlights, Canterbury supplements the benefits of its segmented business with the following numbers that relay the company’s solid financial ground (Source: Slide 18):

Attractive Financial Profile and Consistent FCF Generation

TTM revenue of $64.8 million*
TTM net income of $13 million*
TTM Adjusted EBITDA of $15.6 million*
Extremely low leverage and available $50 million shelf registration
Book value per share of $13.54 reflects cost basis of land

NOTE: *TTM for the period ended March 31, 2022

We are actively searching for a transcript and/or recording of the live presentation, as it seems there was a Q&A offered as part of the event.

Research

Mon, 16 May 2022 12:12:42 GMT

Canterbury Park Holding Corpora (NASDAQ:CPHC) engages in horse racing, card casino, food and beverage, and real estate development businesses. On May 12, 2022 the company reported record Q1 2022 results:

Sales of $13.6 million vs $9.2 million in the prior year
EPS of $0.36 vs $0.12 in the prior year

Looking forward, while we expect labor and other cost pressures will continue to present challenges, we are confident that the operational changes we’ve implemented, combined with our team’s tireless efforts to efficiently manage our business and provide guests with great entertainment, has positioned Canterbury Park to maintain higher margins for the remainder of 2022 compared to pre-pandemic periods…

…We remain focused on managing our cost structure and implementing new operating practices to maintain our increased operating margins…

…Looking at the balance of 2022, we anticipate continued top-line growth in our existing business as operations further normalize and the busy summer season approaches. We also continue to review strategic transactions where we can leverage our operating expertise and strong financial position to expand the markets we operate in, diversify our business and grow our operating results. As we evaluate these opportunities to further transform our business, we will proceed with long-term shareholder growth as our key guiding principle.

On March 20, 2022, when the stock was trading at $19.80, we stated we had a preliminary interview with the company and felt the stock could eventually see a large expansion in its valuation multiples as new management begins to exploit untapped growth opportunities in its casino operations. Since then, shares have increased 48%.

We are impressed with this quarter’s performance, as EPS was well ahead of Q4 2021, which was about six cents on an adjusted basis and on approximately the same amount of revenue as Q1 2022 .

We are eager to see how the company performs moving forward into its seasonally strong second and third quarters, as has been the case in previous years:

CPHC Total Revenue Matrix

—

Research

Sun, 01 May 2022 04:00:00 GMT

Canterbury Park Holding Corpora (NASDAQ:CPHC) - On February 28, 2022 we mentioned that after a weekend skull session we added CPHC to our research funnel in the weekly. On March 20, 2022 we stated we had a preliminary interview with the company and felt the stock could eventually see a large expansion in its valuation multiples as new management begins to exploit untapped growth opportunities in its casino operations. CPHC hosts pari-mutuel wagering on horse races and unbanked card games at its Canterbury park racetrack and card casino facility in Shakopee, Minnesota.

Unfortunately the stock already has increased about 50% before we were able to hold a Fireside Chat conversation which we were scheduling. This is a great example of how you can use our early research to start digging into stories if you connect with them.

Research

Sun, 20 Mar 2022 04:00:00 GMT

We also want to let you know that we had preliminary interviews with $TSRI and $CPHC. We are trying to secure Fireside Chats with these companies since we believe there may be significant upside potential if the growth we think they are capable of materializes. Please stay tuned for our follow ups which may come by way of RFTs to elaborate on the reasons why further analysis is needed

TSRI is an IT staffing company that we believe has tangible organic opportunities, as well as inorganic ones in the form of acquisitions that will enable it to build upon the strong numbers it reported in fiscal Q2 2022.

In CPHC’s case, we believe the stock may eventually see a large expansion in its valuation multiples as new management begins to exploit untapped growth opportunities in its casino operations. CPHC hosts pari-mutuel wagering on horse races and unbanked card games at its Canterbury park racetrack and card casino facility in Shakopee, Minnesota. To catch a glimpse on how the company performed last quarter, please go here.