Posted Monday, March 14, 2005 8:44 AM | Contributed by supermandl
Business Week analyst Robert Barker says that tax advantages in the long term are minimal to owning Cedar Fair.
Read more from Business Week.
This is pretty typical of Wall Street types. They're always focused on the short-term and neglect the big picture. Who wouldn't expect some declines in a year of mild cap ex and a huge acquisition? In the dotcom days, no one would've blinked an eye.
I would argue that there are still plenty of parks out there that Cedar Fair might set it's sights on too.
I'm really looking forward to CF's Q1 financial results to see the effect of Castaway Bay on "out of park" spending...
And, when CF is ready to make their next acquisition, does anyone else think it may not necessarily be a park? CF is showing a knack for being a hotelier...what about a buyout of Great Wolf or Kalahari? Just a thought...
Personally, I learned a tax lesson the hard way by putting FUN stocks in my RRSP (the Canadian equivalent of a 401k). I later learned that the tax agreements between US and Canada regarding registered retirement investments allow dividends from normal corporations to accumulate tax-free, but these agreements do not include limited partnerships like Cedar Fair. The US government clawed back about a third of my FUN dividends through foreign-ownership withholding taxes.
While Cedar Fair is one of the best performing companies in the entertainment sector, there are better investments in other sectors in terms of return on investment and tax efficiency.
If I were in a higher tax bracket I might not be spending so much time on Coasterbuzz. Conversely, if I didn't spend so much time on Coasterbuzz, maybe I'd be in a higher tax bracket.
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