Six Flags Entertainment Corp (SIX), SeaWorld Entertainment Inc (SEAS) & More Summer Stocks

Page 1 of 2

Six Flags Rehan JafferThe summer months are right around the corner. With warmer weather, people often enjoy tourist and recreation activities outside. Companies that offer outdoor recreation and entertainment may seem to give investors a great opportunity for returns. But, can any of the big providers deliver returns?

The big name

Six Flags Entertainment Corp (NYSE:SIX) owns and operates amusement parks in the United States, Canada, and Mexico. It has 16 parks in the United States and one each in Canada and Mexico.

Six Flags Entertainment Corp (NYSE:SIX) recently reported its quarterly earnings. Total earnings were a loss of $1.23 per share. Analysts were expecting a stronger loss of $1.57, so investors should at least be happy about that. The slightly lower loss was due to higher attendance rates during spring break across the country. Not only were there more visitors, each visitor ended up spending more money at the parks – two great signs for the summer season.

Six Flags Entertainment Corp (NYSE:SIX) recently underwent a bankruptcy turnaround. Emerging from bankruptcy, Six Flags Entertainment Corp (NYSE:SIX) has focused on eliminating some of its debt and operating on a stricter debt policy. Total shareholder’s equity has steadily risen in the last few years.

Is this enough for investors? Maybe. More people are entering the park and Six Flags Entertainment Corp (NYSE:SIX) announced that it sold more season passes than it did last year. The company may be able to draw in more revenue from in-park spending with more return visits.

The slightly smaller name

Cedar Fair, L.P. (NYSE:FUN) owns 15 amusement and water parks across the country. In addition to the amusement and theme parks, it also owns five hotels in the United States.

The stock price has steadily risen over the last two years as investors have recognized the strength of Cedar Fair, L.P. (NYSE:FUN)’s brand in local and regional markets. In the last year alone the stock has appreciated 37%. Investors should also note that Cedar Fair, L.P. (NYSE:FUN) pays a staggering 6% dividend yield with its annual dividend of $2.50 per share.

The company has seen both top line and bottom line growth in the last three years as more customers enter their parks. Earnings are expected to increase this year due to an expectation of big spending this summer at its parks. Analysts are expecting an increase of 30% in earnings per share, from $1.81 to $2.36.

If this growth were to occur and the stock kept trading at its current price to earnings ratio of 23.20, the stock would be valued at nearly $55 per share. This is highly unlikely. As the earnings increase, the price to earnings ratio will surely decrease. Six Flags trades at a P/E ratio of 11.60. Cedar Fair, L.P. (NYSE:FUN)’s stock will likely drop to a P/E ratio of 18-20, resulting in a stock price increase of 10% over the next year.

The new IPO

SeaWorld Entertainment Inc (NYSE:SEAS) recently had its initial public offering. With its debut, the company now has a market cap of just over $3 billion. The company operates 10 theme parks across the country.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 44 percentage points in 21 months Learn how!

Lists

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top Businesses to Invest In

Top 5 Things You Might Be Doing Wrong With Your Business

Top 5 Strategic Technology Trends in 2014

Top Rags to Riches Stories

Parenting Behavior That Promotes Future Leaders

Top 5 Mistakes Made by Small Businesses

Top 5 Most Common and Potentially Devastating Financial Blunders

Top 5 Highest Paying Jobs for Web Designers

Top 6 Most Respected Professions that Also Pay Well

Top 5 Pitfalls Investors Should Avoid

Top 6 Lawyers and Policy Makers Under 30

Top 6 New Year’s Resolutions for Entrepreneurs

Top 7 Locations to Check in on Facebook

Top 5 Mistakes made by Rookie eBay Sellers

Top 7 eBook Publishers in 2013

Top 6 Health Industry Trends in 2014

5 Lessons for Entrepreneurs from Seth Godin

Top 5 Success Tips from Jordan Belfort – the Wolf of Wall Street

Best Master’s in Finance Degree Programs

Top 6 Earning Celebrities Over 50

The most expensive sports to play

Top 7 Earning Celebrities Under 25

Best 7 Online Courses to Take: Free Finance MOOCs

Top 6 Bad Habits that Promote Failure

20 Most Valuable Soccer Teams in the World in 2013

12 Most Expensive Countries for Foreign Students

Top 30 Most Influential Women in the World

Top 20 Most Expensive New Year Eve Shows

Top 5 Best Vocational Careers

Top 10 Jobs for 2014 by Salary Gain (Predictions)

Top 5 Digital Trends for 2014

Top 6 Things You Can Do To Increase Your Productivity

Top 9 Trending Smartphones in 2013

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!