NASCAR fans looking to capitalize on the popularity of racing can look no further than International Speedway (NASDAQ:ISCA). The company definitely has the pole position in the industry, but does that warrant consideration as a No. 1 holding in Foolish portfolios?

International Speedway owns or operates 11 speedways throughout the U.S., including the iconic Daytona International Speedway and the Talladega Superspeedway in Alabama, better known now thanks to Will Ferrell and last fall's Talladega Nights flick. Most events held at the facilities are related to the National Association for Stock Car Auto Racing, or NASCAR, and lead to lucrative admission revenue as well as steady food, beverage, and merchandise sales.

The company also benefits from television, radio, and sponsorship revenue. The total business has grown robustly in recent years as racing's popularity has come to rival that of leagues such as the NFL, the NBA, and Major League Baseball.

International Speedway's operations are also quite profitable, as returns on invested capital exceed 10% each year and operating cash flow usually exceeds reported net income by a fairly wide margin. The company also just announced that it acquired the 62.5% it didn't own in Raceway Associates, bringing the Chicagoland Speedway and another raceway in Illinois fully into its fold.

First-quarter results released Tuesday were down slightly because a new television agreement will cause total 2007 rights fees to fall below 2006 levels, even though the overall eight-year deal brings in much more than the previous agreement. In any case, management stuck to its full-year guidance of $3.10 to $3.20 in diluted earnings. Based on the current price of $51.15, the stock is trading at just more than 16 times forward guidance. That's not an overly high multiple to pay for a company with sustainable competitive advantages from its racing relationships and venues.

Don't wave the checkered flag just yet. There have been concerns about International Speedway's growth going forward, which makes sense because racing's popularity has increased so rapidly in recent years. Operating results can also fluctuate considerably, based on weather conditions, and the sport's dependence on the popularity of racing celebrities, sponsorship deals, and finding new racing venues.

Finding venues can prove challenging: International Speedway is experiencing opposition to opening a race track in Washington state and recently decided not to pursue a track on 676 acres it acquired on Staten Island. The New York setback caused an $87.1 million impairment charge late last year, threatening nearly all of the company's investment and ambitions to crack that market.

Another thing to keep in mind is that the France family controls the voting rights in International Speedway under a dual-share arrangement. The family also "owns and controls NASCAR," and the 10-K filing says that certain senior executives could have potential conflicts of interests regarding the way family, company, and NASCAR arrangements are laid out.

Yet overall, International Speedway has served common-share holders well and easily outpaces rivals such as Speedway Motorsports (NYSE:TRK) and Dover Motorsports (NYSE:DVD) in total stock performance. It's also one of the few ways to invest in a leading sports and entertainment franchise, save for World Wrestling Entertainment (NYSE:WWE) or Vail Resorts (NYSE:MTN). I'm still weighing the company's investment merits and drawbacks, but any pullback in the share price could make me a long-term investor.

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Fool contributor Ryan Fuhrmann has no financial interest in any company mentioned. Feel free to email him with feedback or to discuss any companies mentioned further. The Fool has an ironclad disclosure policy.