Undervalued Sires: Still a Value in 2014?

By Nicole Sauer

The September issue of MarketWatch included profiles of eight sires that we considered to be undervalued based on their yearling averages, earnings per starter, and/or progeny statistics compared with their 2013 fees. Now that most 2014 fee announcements have been made, let's review the stallions and their current outlook.

Discreet Cat had the largest fee increase of the eight stallions on our list, jumping from $12,500 to $20,000 (+60%) for 2014. With six graded stakes winners in 2013 including grade I winners Secret Compass and Discreet Marq, Discreet Cat ranks third on the third-crop sires list, and he is second to Street Sense by earnings per starter for his crop. As is common for fourth-crop yearling sires, his yearling average decreased in 2013, averaging 1.4 times his 2014 fee. Expect that ratio to improve with future crops as Discreet Cat is likely to attract better mares going forward.

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Mizzen Mast, one of the more prominent undervalued sires on our list, also earned a fee increase this year. After the success of his two-time Breeders' Cup Turf Sprint (gr. IT) winner Mizdirection as well as French One Thousand Guineas (Fr-I) winner Flotilla, it was no surprise to see his fee rise from $15,000 to $20,000. Prior to Mizdirection's repeat Breeders' Cup win, Mizzen Mast also saw improvement in the sales ring. His yearling average increased by +61% from 2012, led by a $380,000 full sister to graded stakes winner Strike the Bell.

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Pleasantly Perfect is one of two stallions on our list of undervalued sires list to see a decrease in stud fee for 2014. After a lackluster year on the track for his progeny (no stakes winners in 2013 to date), his fee was cut in half, from $10,000 to $5,000. However, Pleasantly Perfect did show strength in the sales ring this year, having more than twice as many yearlings sell than in 2012. His yearling average was up +47% to $26,859, which is 5.4 times his reduced 2014 fee.

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Second-crop sire Run Away and Hide has clearly outperformed in relation to the quality of mares that he has covered so far in his career. Despite having a CI of less than 1.50 in each of his first five years at stud, the son of City Zip is 10th on the second-crop sires list and he leads those sires (including grade I sires Curlin, Majestic Warrior, Midnight Lute, and Into Mischief) by graded stakes winners from starters (6.1%). Run Away and Hide's fee was increased from $5,000 to $7,500 for the 2014 season, a move that should coincide with a well-deserved improvement in mare quality.

13 Comments

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sceptre

Back in September, First Defence was likely the "true" undervalued sire, while the four you mention are, to my mind, pretenders, with little upside potential. From the commercial standpoint, First Defence's main drawback is small crops for the immediate years going forward.  

21 Nov 2013 11:43 AM
Ian Tapp

First Defence did look good at $7,500, but, alas, his fee was doubled to $15,000. I like him, but his only two stakes winners (albeit G1 and G3 winners) are out of well-bred Juddmonte mares.

I'm probably a bit more optimistic than you are about the upside of these undervalued sires, particularly the relatively young Discreet Cat and Run Away and Hide.

22 Nov 2013 1:09 PM
mz

I like Run Away and Hide too.

----

Do you remember what Mr. Prospector started at in Florida?

22 Nov 2013 2:38 PM
sceptre

Hi Ian,

You're right, he was bred to several well bred Juddmonte mares. His G-III winner out of Danehill's full-sister was a poor producer prior to her First Defence-and sold for next to nothing. My main point was, that out of all those mentioned, First Defence appears to have the most upside. I have always liked Discreet Cat, but I think his Forestry gets in the way, and there's been enough of them out there to suggest that he won't break through. I admire Run Away And Hide's looks, he has done fairly well, but doubt there's much upside to him.

22 Nov 2013 3:44 PM
Ian Tapp

mz,

He started at $7,500, I believe. Not exactly a bargain price in 1975, but 15 years later he was at $250K.

22 Nov 2013 3:54 PM
sceptre

mz-

Mr. P. originally stood for $7,500. Trust me, credentials going in, there's no comparison with those mentioned and Mr. P.

22 Nov 2013 3:55 PM
mz

I'm sorry, Sceptre but how can you say there is no comparison?

Mr. Prospector went to stud having never won a Grade 1 but only having finished second or third in one Gr 2 and and one Gr 3.

Pleasantly Perfect won several Grade 1's, including the Breeders Classic and the Dubai World Cup.

Mizzen Mast won Grade 1's and placed in Grade 2's in France.

Run Away and Hide won a Gr 2 and a Gr 3.

None of them have/had bad pedigrees.

Going in, I do not agree with you that there is no comparison.  Why would they have started Mr. Prospector in Fla except for the fact that they thought they should take a chance on an "outsider"?  If there was no comparison, would they not have stood him from the beginning in the Mecca of Kentucky?

On another point, one of Mr. P's seconds was to Forego (in the Carter, I think).  What do you think might have happened if Forego hadn't been a gelding -- and I'm talking from a stud point of view; I know his size operated against him not being gelded but still .....

22 Nov 2013 5:18 PM
sceptre

mz:

I'd really prefer not to get into this too much, and I think your question is probably rhetorical. I think if you had WITNESSED Mr. P's performances in real time, particularly his earlier races, you may not now be debating the point. Now take that style and brilliance, and combine it with the kind of pedigree and sheer athleticism he possessed. Very, very few come to stud with such credentials. The main reason he began his career in FL was because his owner, Mr. Savin, had there a farm...I loved Forego, was there for his Derby, and wagered on him that day to beat Secretariat. Still believe he was the better horse. Also, greatly admired his sire, Forli. Had Forego not been gelded (and retired with same record) he could have been the Forli to really make it (I was, however, wrong about Possee), but his female line (not his size) gives me some pause.

25 Nov 2013 11:00 AM
mz

Sceptre: agree with you about Forli.  Agree to disagree on other points.

25 Nov 2013 3:10 PM
annes

If Im not mistaken, Mr. Prospector was the highest priced yearling of his year, too.

26 Nov 2013 8:24 AM
annes

I believe part of the issue with Discreet Cat is the perception, true or not, that he produces unsound horses. I know many commercial breeders who won't use him because of that.

26 Nov 2013 8:26 AM
Pedigree Ann

Value is entirely in the eye of the beholder. If you don't like a stallion for your mare, on pedigree, conformational, or other grounds, no price will be a good value to you.  "I wouldn't breed her to X if they paid me to," is the way one hears this expressed.

Breeding a mare to a stallion mainly because his offspring ON AVERAGE bring prices a few times higher than his stud fee makes no sense to me. Averages can include a large outlier that disguise a fair number of smaller values. Mares, who are each individuals of varying traits, deserve more thought in the breeding process than that.

01 Dec 2013 11:56 AM
sceptre

Pedigree Ann:

Your comments are all very beside the point. If you're breeding to sell commercially, you better be mindful of what the market (predicted future market) desires. If you're breeding to race, "sire power"/$ is an important consideration and some "holes" often do exist-the point of this article. Also, the best perceived pedigree cross and/or conformation cross per $ is often not the best way to go to produce the best racehorse-you must also have a fair degree of confidence in the chosen stallion's ability to sire good runners-and here also is where the best bang for your buck principle kicks in.  

03 Dec 2013 4:57 PM

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