Richard Zimmerman, the Chief Operating Officer of Cedar Fair, L.P. (NYSE:FUN), a $1.8 billion market cap theme park company, bought 3,000 shares of stock on December 21st at an average price of $32.31 per share. This brings his total direct holdings to a bit above 55,000 shares. Studies show that insider purchases are bullish signs (read more about studies on insider trading), and this makes sense as insiders should be reluctant to increase their economic exposure to the company they work for by buying more shares- unless they are particularly confident in the company’s prospects. Our database of insider trading filings shows that there were some smaller purchases by other insiders in November, and another moderate buy in September (research insider purchases at Cedar Fair). Consensus insider buying is a particularly bullish sign, so we thought it would be useful to take a somewhat closer look at the company.
Cedar Fair, L.P. operates several amusement parks and water parks as well as a limited number of hotels for its customers. In the third quarter of 2012, revenue was down slightly compared to a year ago; an increase in accommodations and other revenue partially offset declines in admissions and other park revenue (such as food and merchandise). This was somewhat of a reversal from the first half of the year, as admissions revenue was actually up modestly in the first nine months of 2012 versus the same period in 2011. This is particularly notable as the third quarter appears to generally be responsible for a little over half of Cedar Fair’s annual sales. Net income was also down last quarter compared to Q3 2011, but lighter losses in the first half of the year have left Cedar Fair with EPS of $2.00 so far compared to $1.28 at this point last year.