Churchill Downs Incorporated (CHDN) Sold Off Following Earnings Release

Baron Funds, an investment management company, released its “Baron Real Estate Fund” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. The fund rose 3.61% (Institutional Shares) in the quarter compared to a 1.46% decline for the MSCI US REIT Index (the REIT Index) and a 6.13% gain for the MSCI USA IMI Extended Real Estate Index (the MSCI Real Estate Index). In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its second-quarter 2025 investor letter, Baron Real Estate Fund highlighted stocks such as Churchill Downs Incorporated (NASDAQ:CHDN). Churchill Downs Incorporated (NASDAQ:CHDN) is a US-based racing, online wagering, and gaming entertainment company. The one-month return of Churchill Downs Incorporated (NASDAQ:CHDN) was 1.04%, and its shares lost 21.40% of their value over the last 52 weeks.  On August 29, 2025, Churchill Downs Incorporated (NASDAQ:CHDN) stock closed at $106.39 per share, with a market capitalization of $7.461 billion.

Baron Real Estate Fund stated the following regarding Churchill Downs Incorporated (NASDAQ:CHDN) in its second quarter 2025 investor letter:

“Churchill Downs Incorporated (NASDAQ:CHDN), which has acquired and developed various entertainment assets including the Churchill Downs racetrack which hosts the Kentucky Derby, was a detractor during the quarter following an earnings release that showed weakening trends in their Virginia market and lower-than-expected Kentucky Derby earnings. The company also indefinitely delayed a large project to expand the Kentucky Derby, but it was not clear about pivoting available capital to buying-back shares. We believe the Virginia market and their regional gaming portfolio may remain under pressure. The company has numerous growth projects with attractive prospects, but developments will take time to ramp to full profitability and in the meantime leverage remains high. Due to uncertain business trends and concerns around competitive pressures in their Virginia market, we decided to exit the position.”

A city skyline looking down on a busy racetrack with jockeys on horseback.

Churchill Downs Incorporated (NASDAQ:CHDN) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 39 hedge fund portfolios held Churchill Downs Incorporated (NASDAQ:CHDN) at the end of the first quarter, which was 41 in the previous quarter. In the second quarter of 2025, Churchill Downs Incorporated (NASDAQ:CHDN) delivered all-time record net revenue of $934 million and all-time record adjusted EBITDA of $451 million. While we acknowledge the risk and potential of Churchill Downs Incorporated (NASDAQ:CHDN) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CHURCHILL DOWNS INCORPORATED (NASDAQ:CHDN) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered Churchill Downs Incorporated (NASDAQ:CHDN) and shared The London Company Mid Cap Strategy’s views on the business. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.