A Park In Your Portfolio?

Saturday, November 20, 2004 1:45 AM
Just wondering if anyone here owns stock in any of the companies that own parks (Cedar Fair, Disney, Six Flags [yeah, right], or any of the others). I'm thinking of moving some investments around, and thought why not invest in amusements.

I'm trying to research the different stocks, but it seems that many of the people on the financial websites either have no clue about how the amusement industry is run or should be run, or think the whole idea is beneath them. Most have a general negative view of the industry, at least for making profits. Obviously, they've never been on this site.

So without getting too personal, I'm just wondering what people's experiences have been-- good, bad, indifferent. I'd also appreciate any suggestions on where to look for good, on the level, no b.s. info. Thanks in advance.

Saturday, November 20, 2004 1:55 AM
Buy in the winter, sell in the summer. If you're in it for the short run, Six Flags stock is actually pretty good. It's been bouncing up and down for the last while. Buy it when it's down at $4.00 like it was a while ago, sell it when it gets up to $8.00 or $9.00 like it has a few months ago. You double your money...
Sunday, November 21, 2004 12:33 AM
Why not? Because we're in the middle of a secular bear megatrend (or so I've heard). When it comes down to it; it's not capital expenditures, customer service, or even the much cited weather that matter the most for Cedar Fair or Six Flags. It's the amount of extra cash in the pockets of American families. So either bet with or against the strength of the American consumer. Disney has a lot of other projects you'd have to keep an eye on.

Looking at the five year chart, PKS always has a big fall in the 3rd quarter when they learn that 2nd quarter attendance was terrible. Coaster Lover's advice seems valid. So if you get in for the short term, sell before those conference calls.

Sunday, November 21, 2004 3:14 AM
I own a bunch of six flags stock. And I'm hoping with Kingda Ka next season that there attendance goes up as well as there stock.
Sunday, November 21, 2004 10:53 AM
The Motley Fool has a decent amount of information available and even has a newsgroup call the "Coaster Lovin' Fools".

They love Cedar Fair, question Six Flags, and even Disney. They don't say too much about Viacom (Paramount).

I own FUN and PKS. I have made money on both. As discussed often here, FUN pays a quarterly dividend that comes up to about $1.80 per share per year. It may not sound like much, but compared to others, it's top notch.

*** Edited 11/21/2004 3:54:19 PM UTC by CoasterDad64***

Sunday, November 21, 2004 11:04 AM
I think of my Cedar Fair stock as more of a savings account with a better interest rate. It's not going to double your money overnight, but I've made a lot more on my money than if I left it in my bank's lame interest rate savings account.
Sunday, November 21, 2004 9:30 PM
Neither of the pure players (PKS and FUN) are going to make you rich in the short term. I try to be optimistic and think that Six Flags will get it together, but I don't think I could buy in good conscience. I'd wait to see what happens when they announce results next July.

Cedar Fair is all about the quarterly distribution. The only negative is that right now getting "in" is kind of expensive, as it's trading around $31. But who knows... I see a lot of potential transactions in the coming years, so anything could happen.

Monday, November 22, 2004 10:05 PM
PKS and FUN, as Jeff has pointed out, are the only pure plays.

You can love Islands of Adventure all you want it won't move shares of General Electric.

You can bet on SheiKra giving Busch Gardens Tampa a spike but it won't be worth a hill of beans to Anheuser-Busch.

Disney's largest operating segment is its broadcasting networks. Hershey doesn't even own HersheyPark. Viacom's too big for the Paramount parks to weigh in significantly.

That doesn't mean that you're down to only buying Cedar Fair or Six Flags. However, each one is very different from the other. For starters, Cedar Fair isn't technically a stock, as you are buying into units of a limited partnership. Most of the income is redistributed to the unitholders so as long as Cedar Fair stays consistently profitable (and it has over the years) you can count on a healthy dividend. That keeps the investment from tanking yet it's not exactly a growth stock.

Six Flags is what you would consider your high risk, high reward situation. While Cedar Fair is likely to be somewhere between the mid 20s to the mid 30s by this time next year Six Flags could be at $3 and change if it has another bad year or as high as $8-9 if it turns itself around. So, on a percentage basis it's got a lot of potential, both good and bad.

There is a third option here, Six Flags with the fat dividend. Its the Six Flags PIERS (which stands for preferred income equity redeemable shares). It's like a convertible bond that trades as a stock. It's yielding 8.4% right now -- yet obviously being a creditor to Six Flags has its risk. The stock also has to appreciate quite a bit from here for the conversion feature to move the shares. So, it's not attractive in a few ways, but it is a way to milk spending money out of a Six Flags investment.

Monday, November 22, 2004 11:12 PM
One stock I'll buy in the next few weeks is Euro Disney SCA. Its the parent company of DLP.

Why? The stocks can't go lower than that... last time I checked, its was like 0.50 euros each stock! The perks you get? By buying a block of a 100, you can join shareholder club, which gives you discounts on tickets, annual passes and admission to the Mickey Salon... a area at the entrance of the park with free drinks, breakfast and you don't even have to wait in line to enter the park.


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