Here's Why Churchill Downs (CHDN) Traded Lower in Q2

London Company’s Small-Mid Cap Strategy investor letter points to Churchill Downs (NASDAQ: CHDN) as an example of stock weakness that it says isn’t fully reflected in fundamentals. The letter says U.S. equities rebounded strongly in Q2 2026: the Russell 3000 rose 15.4%, helped by AI infrastructure spending, strong earnings, and easing Middle East tensions. The portfolio returned 12.1% gross and 11.8% net versus a 20.3% gain in the Russell 2500. London Company attributes relative performance drag to high-beta, high-volatility stocks, while “Quality” lagged. It highlights CHDN’s “Derby Week” growth falling slightly short of elevated expectations. Still, it cites solid operations, including growth in the Historical Racing Machine business, improving leverage, and healthy cash flow generation. On Aug. 26, 2026, CHDN closed at $87.57.