This Week in Sports & Leisure by Jeff Todd (TMFMensa@aol.com) and Vince Hanks (TMFElwood@aol.com)Rock Hill, SC & Northville, MI (July 26, 1997) --Hello and welcome Fools to the wild world of sports & leisure as seen through the eyes of your self-appointed (well actually we were HIRED to do this!) sports gurus, Vince Hanks AKA TMF Elwood, and me, Jeff Todd, AKA TMF Mensa. We will try to give you the scoop on as many sports and leisure companies as we can, however if you should fail to see your favorite on our weekly scoreboard, please feel free to drop us a note and we'll do our best to cover that puppy. Now, we tee up the week in review.Vince & Jeff's Sports & Leisure News of the WeekThe focus was on Alan Greenspan during the early part of the week, and the markets reacted positively when Uncle Alan decided everything was just peachy, although the Dow is up about 30% since his now infamous December declaration of 'irrational exuberance'. Positive corporate earnings reports continued to stream in throughout the week, which resulted in the Dow index of 30 stocks closing Friday at 8,113.44, up 228 points for the week, or 2.8%. Several sports companies reported earnings, see below for the highlights. And still more bullish news when Phil Jackson signed on for another year with the NBA's Chicago Bulls, sorry Vince ol' buddy but your Pistons will have to wait at least ONE more year! Now that's 'rational exuberance'!Speaking of the Bulls, one of Michael Jordan's favorite companies, Nike (NYSE: NKE) closed the week at 61 3/8, down slightly from last week's close of 61 13/16. The big news from Nike world headquarters this week was the new agreement inked with winter sports company Marker International (Nasdaq: MRKR) of Salt Lake City, Utah. Nike and Marker plan to immediately begin developing winter sports products including snowboards, snowboard boots and bindings. Nike's snowboard equipment is not scheduled to be available until the fall of 1999, so the company will miss the 1998 winter sales season, however it will release the new line of snowboard apparel at retail this fall.Two other snowboard companies reported earnings during the week, Morrow Snowboards, Inc. (Nasdaq: MRRW), and also Ride, Inc. (Nasdaq: RIDE), which was a whopping 112% gainer for the Fool portfolio in 1995. Both companies announced losses for the quarter, as is expected in the seasonal environment in which both operate.Morrow reported net sales for the quarter of $2.149 million, compared with $2.038 million in the second quarter of 1996. The net loss for the second quarter of 1997 was $830,000 or a loss of $0.15 per share, compared with a net loss of $474,000 or $0.08 per share in the second quarter of 1996. Analysts had forecast a loss of only $0.10, but the stock closed the week unchanged at $4 3/8, so the miss was uneventful.Ride reported net sales for the quarter of $2.525 million, compared with $13.501 million in the second quarter of 1996. The net loss for the second quarter of 1997 was $2.254 million or a loss of $0.21 per share, compared with a net gain of $411,000 or $0.04 per share in the second quarter of 1996. Ouch. However, the loss was in line with expectations, and Ride closed the week at 3 1/16, down only 1/8.Nike's entrance into the snowboard game certainly will add some moguls to the slopes for Morrow and Ride, but fortunately for both companies the 1998 winter season will be Nike-less as Marker and Nike ramp production for the 1999 season.On Monday, leisure giant Brunswick Corp. (NYSE: BC) reported a record $82.9 million in net earnings, or $0.83 per share, for the quarter ended June 30, 1997, compared with earnings of $69.8 million, or $0.71 per share, for the second quarter of 1996, a 19% increase. Sales rose 17% to $1,008.2 million, topping the billion dollar mark for the first time in company history, and were up from $858.3 million in the same quarter in 1996. Recreation segment sales for the quarter increased 59% to $349.1 million, and Marine segment sales were up three percent in the second quarter to $659.1 million. Investors rewarded the company's report by boosting the stock price to a 52-week high of $33 during the Friday session, before finally closing at $32 3/8, up almost three percent for the week. From the company's boilerplate: Headquartered in Lake Forest, Illinois, Brunswick is a multinational company serving outdoor and indoor active recreation markets with consumer products that include such leading brands as Zebco and Quantum fishing reels and reel/rod combinations; American Camper and Remington camping gear; Igloo coolers and ice chests; Mongoose, Roadmaster and Ride Hard bicycles; Brunswick bowling and family entertainment centers, equipment and consumer products; Brunswick billiards tables; Life Fitness cardiovascular and strength training equipment; Sea Ray, Bayliner and Maxum pleasure boats, Baja high-performance boats, Boston Whaler and Trophy offshore fishing boats; Mercury, Mariner and Force outboard engines and MerCruiser sterndrives and inboard engines. How's that for diversity?!Brunswick trades at a current PE multiple of 15.7 with a 5-year growth rate forecast of 17%, and the company grew 39% over the past five years. Keep your eye on the ball with this one, or is it oar in the water?!Penske Motorsports, Inc. (Nasdaq: SPWY) and International Speedway Corporation (Nasdaq: ISCA) jointly announced on Wednesday that each company had purchased a forty percent interest in Homestead-Miami Speedway, LLC, the operators of Metro-Dade Homestead Motorsports Complex (M-DHMC) in Dade County, Florida. Track founder Ralph Sanchez and his partner, multi-sport franchise owner H. Wayne Huizenga, each will maintain their minority ten percent ownership interest in the two-year-old facility.The purchase is the third in two months for International Speedway. The company announced just last week the purchase of Phoenix International Raceway in Arizona from a private owner for somewhere between $60-$67million, and in early June acquired Watkins Glen International, which is located in New York state, from Corning Enterprises. International Speedway is also the owner of Daytona International Speedway in Daytona Beach, Florida, which every spring is the site of the world famous Daytona 500 NASCAR race. The stock closed at 21 1/16 for the week, down slightly.Penske Motorsports, a subsidiary of Penske Corporation which was founded by industry giant Roger Penske, has been on a tear as well, recently acquiring controlling interest in North Carolina Motor Speedway in Rockingham, N.C., and debuting the company's newest facility, the California Speedway, located outside Los Angeles. The stock closed the week off 1/8 at 32 7/8.Both companies are following the trail blazed by Speedway Motorports, Inc. (NYSE: TRK). Since 1995, Speedway Motorsports has acquired tracks in California, Tennessee, North Carolina and built a facility in Texas as well. Speedway closed the week at 21 11/16, up just under one percent.The NASCAR Winston Cup schedule is dominated by these three companies. Speedway Motorsports and International Speedway both capture 25% of the race schedule, while Penske Motorsports has a 16% share, giving the three companies 66% of the action, or 21 of the 32 sanctioned races in stock car racing's premier division. There are other divisions and types of racing available at facilities owned by these companies as well, however the hottest segment by far is NASCAR, the fastest growing spectator sport in the United States.In other racing-related news, Rawlings Sporting Goods (Nasdaq: RAWL) kicks off a new product with the public debut of the company's Rawlings Sport Drink at the Gateway 300 Busch Grand National Race in Madison, Illinois. Samples of the drink will be available on the racetrack at the Rawlings Sports Caravan, a unique traveling museum and workshop. The Caravan also conducts demonstrations on how to make baseball equipment. The stock closed the week up 5.4% at 9 3/4. Rawlings is mostly known for being the official baseball supplier to Major and Minor League Baseball, and the exclusive supplier of the official basketball and football for the NCAA Championships, so this latest venture is a quantum leap for the company. Sports Fools will be watching!Callaway Golf Company (NYSE: ELY) made the headlines when it announced an agreement to purchase the assets of golf putter maker Odyssey Sports, Inc. from Odyssey parent company U.S. Industries, Inc., for the price of $130 million in cash. The purchase is synergistic for Callaway Golf, the company had been interested in providing a premium putter to customers, and Odyssey putters are some of the finest on the market, currently number one in use on the Senior PGA and Ladies PGA Tours, second on the Nike Tour, and third on the PGA Tour. A closing date for the transaction has yet to be announced. Callaway closed the week down 7% at 35 1/8, as investors reacted to the news.Another golfing company, Family Golf Centers, Inc. (Nasdaq: FGCI) was the biggest winner of all the stocks we are currently following, closing up 5.8% for the week at $25 on no news. The company grew a whopping 68% over the past five years, and analysts see a 35% growth rate over the next five years vs. the industry rate of 15%. Family Golf trades at a 1997 forward PE of 27.4, and sports a PEG of .78. The company owns, operates and manages 45 golf centers including seven Golden Bear Golf Centers, licensed from Jack Nicklaus' licensing company, Golden Bear International. Another one to watch.That's it for the most notable news events in the wild world of Fool Sports, tune in next time for the latest scores and highlights!Weekly Price Activity of Selected Sports & Leisure Stocks Price Price Percent 7/18/97 7/25/97 Gain/(Loss)BC 31 1/2 32 3/8 2.78 BIKE 18 15/16 18 1/8 (4.29)BSPT 7 1/16 7 (0.89) CVE 15 15/16 16 1/8 1.18 ELY 37 5/8 35 1/8 (7.12) FGCI 23 5/8 25 5.82 FLH 31 15/16 32 5/16 1.17 FPWR 19 5/8 19 1/2 (0.64) GTBX 8 7 15/16 (0.78) HUF 14 7/8 14 13/16 (0.42) ISCA 21 21 1/16 .30 JACK 11 1/4 10 3/8 (8.43)MRRW 4 3/8 4 3/8 ----- NKE 61 13/16 61 3/8 (0.71)PAR 11 7/16 11 7/8 3.82 PAW 21 3/4 21 1/2 (1.16) RAWL 9 1/4 9 3/4 5.40 RBK 49 1/2 51 15/16 4.92 RIDE 3 3/16 3 1/16 (4.08)SPOR 17 1/2 16 1/8 (8.53) SPWY 33 32 7/8 (0.38) TRK 21 1/2 21 11/16 .87 TSA 18 17 7/8 (0.70) Fool on and see you next week!Jeff ToddTMF Mensa(c) Copyright 1997, The Motley Fool. All rights reserved. This material is for personal use only. Replication and redissemination, including posting to news groups, is expressly prohibited without the prior written consent of the Motley Fool.
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