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Anyone follows ATN? I honestly love the performer recently...

Zarin
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Hi!
I've just started following ATN as it showed up in my first install of the FOOL8 spreadsheet.

It looks good to me but what do you like about ATN and it's future? And, do you know what all the legal fuss is about in some of the earlier posts (i.e. Are you conerned about it?)

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It looks good to me but what do you like about ATN and it's future?

Hi there!
Yes, not only it looks good, it's been performing even better. What I like about it? It's been the number one merchandiser and licensor in NASCAR. High margins that indicate little-to-no competition, dominant market share, apparently competent management. Though,at this point I can't state that I know the business inside out. The balance sheet is strong, they've got quality earnings as well. It's a cash cow.
During recent recovery they seem to have cut costs, implemented strong controls,eliminated slow-moving inventory and refocused on our core strengths (they also rewarded managemant team accordingly, f.Wagenhals's,CEO bonus for 2001 was $1million. But that I guess, is a part of SG&A costs).

TRhe future outlook is quite optimistic consider increasing popularity of NASCAR. Brand name (or names) is in place, who hasn't heard of D.Earnhardt and son? Although, as Ben Graham stated "Obvious prospects for physical growth in a business do not translate into obvious profits for investors.."

And, do you know what all the legal fuss is about in some of the earlier posts (i.e. Are you conerned about it?)

No, I'm not concerned about it. In fact on Feb28,02 ATN released an article claiming: "As a result of the new agreement, Speedway and Action have agreed that all prior issues have been fully resolved and that the pending lawsuit filed earlier by Speedway's racetracks will be dismissed.

Bill Brooks, VP of Speedway Motorsports, said, "We are pleased to put this matter behind us and to be able to continue our mutually beneficial business relationshipwith Action"."

I still think it's not cheap right now. PE might be a little lower that its estimated growth rate, but I'll hold off and expect better levels to buy in on this. It's a tune in later one. Love the performance though. Might qualify as a turnaround.

Also if you're a fan of Foolish8 criteria, really like DYII, it should qualify....

Foolishly,
MP
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Hey thanks for the info and your perspective. Looking at the price history, I wish I had been looking at ATN a year ago! I've been trying to do a little research to see why there was a big dip in 2000, revenue drop, net loss, etc. I think you were referring to this when you mentioned their recovery strategy. I also ran across this in a description of the company:

In September 2000, ATN entered into a ten-year outsourcing and exclusive supply agreement with QVC, under which the company will be QVC's exclusive supplier for motorsports memorabilia offered by ATN's Collectors' Club, and QVC will be the exclusive distributor for the Collectors' Club products, including distribution over the Internet.

In December 1999, the company announced a repurchase program of up to $40 million of its common stock. The initial term of the program was for one year, subject to extension.


I was wondering how these activities played into the decline and subsequent turn around since it was roughly in the same time period.

Also, Since the business it so tied to racing, and although my perception is that the popularity of racing is increasing, what would happen if the popularity decreased? I thought it might be fun to look at some trend analysis of the racing industry... tv viewers, race track attendance, etc. There has bound to be a strong correlation between ATN revenues and some racing industry data. Have you done anything like that or seen any reports to that effect?

One more thing... thanks for the tip on DYII, I'll check it out!

Thanks again!
JB
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I think you were referring to this when you mentioned their recovery strategy. I also ran across this in a description of the company:

Hey JB,
Yes, I mostly based my statement on that.

There has bound to be a strong correlation between ATN revenues and some racing industry data. Have you done anything like that or seen any reports to that effect?

well, I have yet to spare some time to look through industry data analysis, but normaly, I'd look for some sort of association run by one of those .org or .gov organizations. Also I often manage to find referrals to such associations under "industry overview" in a company annual report.

http://www.nascar.com/comm/ might be a good start

Regards,
MP




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I was curious about that dip in profits and stock price also. I read all of the SEC filings and listened to the conference calls to figure it out.
As best as I can make out ATN attempted to market their products through a website which they developed. This was timed co-incidently with the beginning of the .com bust. Their website and the investment tanked causing a huge write off ( I seem to remember $3.5 million, but look for the numbers in the fy2000 report). This made most of the difference between profit and loss. ATN then did a management housecleaning and dumped it's web enterprise.
Now ATN has a web presence, goracing.com, which is managed by QVC which is turning into a profitable arrangement for both.
Companies make mistakes all the time, sometimes very expensive ones. Good companies/management recover, learn and move on. It appears this is what ATN has done.
JK
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Thanks for the info.

What do you think of the idea of somehow trying to correlate ATN success to the continuing popularity of NASCAR? I went to the NASCAR site and did not find any data on attendence/viewer trends.

JB

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JB,
If researching the industry popularity trends is imprtant to you, why not call up the Investor Relations dep-t at ATN and ask.
Up tothis day, IR-s and insiders of different firms have proven to be the first to provide usefull insights on such data, since they appear to be the most interested ones to sell you on their stock. They normaly get paid for it too!! But, good luck. Don't forget to share the news on this board.

Regards,
Zarin
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Hi JB,

Also, Since the business it so tied to racing, and although my perception is that the popularity of racing is increasing, what would happen if the popularity decreased? I thought it might be fun to look at some trend analysis of the racing industry... tv viewers, race track attendance, etc. There has bound to be a strong correlation between ATN revenues and some racing industry data. Have you done anything like that or seen any reports to that effect?


Here are some links that might help. But I found it harder to get attendance records after 2000, other than television viewer statistics.
You might run a www.google.com search on the different Nascar races. The links below give names to the different divisions. For instance, a google search on Winston Cup attendance for a certain year might turn up some extra information. That might be a way of trying to fill in some attendance blanks. It appears that the attendance is growing faster than other sporting attractions from some of the links below.

http://www.daimlerchrysler.com/index_e.htm?/news/top/1999/t91015_e.htm

http://www.jerrodsessler.com/marketing3.htm

http://www.geocities.com/racndeb/Stats.html


http://www.pacpubserver.com/new/enter/3-25-99/nascar.html

http://capraceteam.com/cover/whynascar.html

http://www.stockcars.net/sponsors.html

http://www.motorsports2000.net/attendan.htm

tom
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