Keeneland September Sale Profitable for Pinhookers

There is a good reason pinhookers gravitate to the Keeneland September Yearling Sale.

For the most part, horses bought out of the marathon auction have proven profitable for those adventurous speculators buying yearlings to resell as 2-year-olds in training.

According to figures compiled by BloodHorse MarketWatch, the 485 yearlings purchased at Keeneland's sale last year who were resold as juveniles this year nearly doubled their initial price.

As a group, the Keeneland yearlings were bought for an aggregate $33,314,400, for an average price of $68,689 and a $50,000 median. When those same horses were sold as 2-year-olds, they grossed $64,336,287, a gain of 93.1%, not taking into account expenses from the time of purchase until resell. The resale average was $132,652, with a median of $70,000.

"This is where it happens," said Wavertree Stables' Ciaran Dunne as he inspected horses at Keeneland on a humid, overcast morning Sept. 8, two days prior to the start of the auction. "The meat and potatoes of what we do is Keeneland September. With the other (yearling) sales, you fill in around the edges."

Dunne, who shops all the major yearling sales in search of horses on behalf of his partnership groups, said the critical mass of so many horses on offer—4,538 are cataloged for this year's Sept. 10-23 auction (with a dark day Sept. 14)—provides diversity in all price and quality ranges.

"The beauty of Keeneland September is that with so many horses, (buyers) get spread around, so you have more opportunities, as opposed to boutique sales where people don't miss any," said Dunne, who like other pinhookers is always looking for value. "That (boutique sales concept) obviously doesn't work for us when we're trying to sneak in here and slide one out. In those smaller sales, you don't have that opportunity."

While the vast number of horses cataloged at Keeneland can appear daunting, Dunne said it actually plays into the hands of pinhookers who have a proven system.

"We feel the greater the numbers, the better the advantage is for us, because (we have) enough confidence in our system that we don't miss much of anything," Dunne said, adding that he works with an experienced team that helps pinpoint which horses should be given final consideration. "We have a couple of people we have used as 'shortlisters' and we have used them for 20 years, so I feel we're all on the same page.

"We would be happier if they sold more every day," Dunne said. "The more difficult they make it for everybody else, the better for us."

To underscore the importance of Keeneland September to his pinhooking program, Dunne estimated that if he buys 50 yearlings a year, 35 are usually purchased out of the fall sale.

"This is where it happens," Dunne said. "We have been in business for 20 years, and if we hadn't done well at Keeneland September, we wouldn't have been in business that long."

Another Florida-based pinhooker, Raul Reyes of King's Equine, agreed that Keeneland September is a primo shopping place.

"This is the place to reload," said Reyes, adding that pinhookers are not necessarily looking for the best horses when they go through the ring but ones who have the ability to improve. "I have done very well here, especially (with) horses I've bought out of Book 1 (the catalog placement of those yearlings perceived to be the best-bred and conformed). I made about 70% profit on the horses I bought here last year. The quality is here, and I just need to find the ones that need to grow up later. That's the key—to spot the horse that will grow in the next six months."

"It's the yearling sale on the global sales calendar that you cannot miss if you're in the horse business," said Nick de Meric, who buys to pinhook and on behalf of end-users. "There is something for everybody. There is a broader cross section of sires, pedigrees, and physical types than you will find under one roof anywhere."

De Meric said the size of the Keeneland catalog means buyers must be organized and adhere to their game plans.

"It is an exercise in logistics and stamina, for both buyers and sellers alike," said de Meric, who is one of five within the de Meric Sales operation working the September sale. "You have to be organized. Once you get behind with these numbers, you start making rash decisions, and as we all know, that will bite you in the butt sooner rather than later.

"We stay organized and we stay focused," de Meric contiinued. "We try to keep going and outlast the competition. You can find value here, but you have to work at it. You have to find what is value for you and back up your own judgment. It's a very subjective business, and what you feel good about is what you have to act on."

De Meric said pinhookers play a vital role in the health of the Keeneland September sale, taking a major risk versus future rewards.

"Pinhookers put a lot of money into this industry, and mostly it is our own money," de Meric said. "We are a significant buying bloc, and we need to keep turning money over in order to keep coming back."