Times Are Tough for Pinhookers

Their rate of return on investment was 30.7% at OBS February select juvenile auction.

If the recent Ocala Breeders’ Sales Co. (OBS) February select sale of 2-year-olds in training was any indication, it’s going to be a tough year for yearling-to-juvenile pinhookers. The rate of return (ROR) on their investment, 30.7%, ranked among their worst ever based on figures that date back to 1990. It was the weakest since the ROR dropped to its lowest point during the 20-year period of 17.1% in 1993. 

Other anemic RORs were 17.6% in 1991, 33.7% in 1992, 33.2% in 1994, and 36.9% in 1996.

Pinhookers struggled even though they reduced their risk for this year’s OBS auction, paying an average price of $66,919 for their stock as yearlings. The amount was down 11.8% from the auction’s all-time high of $75,869 in 2008. However, when those yearlings were resold as 2-year-olds, they averaged $105,847, which was down 34.4% from the auction’s all-time high of $161,475 last year.

Only 33% of the pinhooked horses offered at the Feb. 17 OBS sale were profitable for their consignors. That was down significantly from the 50% that made money in 2008, and it was the lowest in the 20-year period dating back to 1990. The previous record low was 35% in 1991.

The calculation used by The Blood-Horse to determine the financial performance of pinhookers includes an $18,000 cost of upkeep and the sale company’s 5% commission. The cost of upkeep has varied over the years, and it was increased to $18,000 (from $10,000) in 2008. The Blood-Horse started including the sale company commission in 2001.

The OBS February auction was the first major select sale of 2-year-olds in training for 2009. The next is the Fasig-Tipton Florida sale at Calder Race Course March 3.