Theme Park Stocks
I'm looking for investment advice.
I recently received a sum of money that I plan to invest in stocks. For the most part, I'll be investing in commodities and technical companies, but it also seemed appropriate to play the entertainment industry.
Do any Insiders invest in theme park companies? What are your recommendations? What should I avoid?
Simply based on upcoming projects and not on statistical projections, I think Disney and NBC/Universal would be safe bets for the new year.
Thanks for any help.
Go with NBC and Disney. They are both solid companies.
However, perhaps keep your eyes out when Six Flags make it back on the stock market (it was knocked off the NYSE when their stock plummited). Chances are, it will start out low and should rise. It couldn't go any worse in stocks for them.
But just go with NBC and Disney if you are planning for the long run. Both companies have alot of assets that will keep the stock from high fluctuations.
I have stock in Disney
From Tony Duda
Posted January 21, 2011 at 6:48 PM
Better check out NBCs status. I think Comcast is buying them.
Well....Comcast.
Comcast tried to buy Disney, but it never went though!
Disney is available!
I was wondering about the scoop on Six Flags. Any ideas when it will return to Wall St.?
I don't know about Six Flags, but I do know that I almost bought them when their stock was so low. Thank goodness I didn't since their stock basically crashed. I am just saying that perhaps with all the Six Flags news coming out that makes the chain seem on the upstream, you might be able to catch the wave.
Then again, I am not sure if theme park stock is really good to get. I mean, Universal and Disney are both multi billion dollar entertainment corporations so the stocks might be solid for reasons other than the parks. Six Flags does not have that luxury.
There are more viable options, but it may be a logical choice since I follow theme parks closer than any other industry. In the meantime, I'll stick to commodities.
From James Rao
Posted January 22, 2011 at 4:27 PM
I don't see Six Flags as a company that is headed in the right direction. With the firing of Shapiro, they have once again headed down the "build more coasters" path instead of the "attract the family" path. Sure it will be a boon for Magic Mountain to be the Coaster Capital of the World, and the attention that parks in Texas, Georgia, and New Jersey will garner for their "new" coasters will draw fans. But any surge in revenue will be short-lived, and once the newness wears off and people realize that Six Flags is still the armpit of the industry, revenues will plummet once again.
I hope I am wrong, but I would not put any money into that dog of a stock. Not now, anyway.
The only affordable and somewhat decent option might be Cedar Fair (FUN), despite the news of their recent upper management squabbles. At the very least, Cedar Fair generally keeps their spending in check and is focused on building well-rounded parks that cater to a wide range of demographics. I don't know that their stock will ever "go through the roof", but it could make you a few dollars in the long run.
But, like others have said, there are probably much better ways to invest your windfall.
What do I know, though? I am the guy who owned a 1,000 shares of Marvel (MVL) purchased at $4/share. I held it for several years before selling when it hit $10/share. Seems like a nice move, until you consider the fact that Marvel stock eventually surpassed $50/share and the company was purchased by Disney last year.
Peter Lynch, I am not, although I did follow his mantra: "Invest In What You Know." I just didn't stick with it long enough.
Six Flags is back on the market. I bought 500 shares at the end of 2009 at about $0.15 a share. Lost $70 there when the stocks went bust in the bankruptcy. Sadly, back on the market now around $56/share.
I wouldn't buy Universal. They have a horrible contract with Spielberg, in which he is milking them for doing squat.
Disney is a solid buy, but may be a little overvalued at the moment, after the recent stock market run-up. Actually, I would wait for another downturn in the market before jumping into anything.
One of the rules I live by in the stock market is this. When buying stock, you are investing in two things, the product and the management. If you don't have both, it becomes a risk. The secret lies within being able to analyze those two things.
The Disney stock is a decent play if you are willing to hold on to it for the long term. It's a fairly expensive buy for such a small return. Don't expect it to rain cash on you though.
At 50 plus a share, I wouldn't touch Six Flags with a ten foot pole. Right now, they are financially fit, but that's only due to bankruptcy. Their attendance is up, but are those people spending money? and can they keep that number up? To me the stock is already overvalued.
The issue with NBC Universal is that there are so many moving parts to it. If I were investing in the Universal parks alone, I might do that, but that's only a small part of the company. There are a whole lot of players in this one, and I think that certain industries involved in the company are headed for a little shake-up. Anything that involves movie studios, cable companies, and ISPs is a risk, and I'm not sure the reward is worth the risk in this case.
Cedar Fair was a really good buy about a year ago when the price was under 10 bucks. It still is a decent buy because the company looks to have the Paramount debt load under control, which was a purchase uncharacteristic of a company that's usually fiscally conservative...and the economy is starting to recover as well. The shareholders apparently believe in the company, because they recently voted down a lowball takeover bid by one of the largest shareholders. There's still a lot of shakeup in the boardroom, but I think it will all work out soon. The real curiosity will be when Dick Kinzel retires and someone new steps into the drivers seat. This one is an affordable buy at around 18 bucks right now, and I do think that as the economy recovers more, this stock will continue to go up. Maybe not quickly, but barring any market crashes or calamities, this one is a pretty good one to have (raises hand).
If there is a park company out there that I would invest in with complete confidence, it's Herschend Entertainment. They however, are a private company, and if they are wise they will remain that way. Few things can dilute the quality of a product like its company becoming beholden to the stock market.
Just remember that entertainment investments have a lot more factors that affect their worth. Not only are there the management, financial, and economic factors, but there are also shifting cultural trends, finicky company direction, and individual taste. In other words, don't buy a stock just because you love the company's product. If their management is bad or they are incapable of evolving, you might as well be tearing up money and throwing it away.
I would never invest in something just because I love their product. If I held that ground, I wouldn't be investing in lithium companies.
However, I do appreciate your other comments. Maybe the entertainment industry is a little unpredictable for someone as inexperienced as me.
Perhaps the question is: Which Parks are in the stock market?
Disney?
Six Flags?
I am not sure about Universal now due to the Comcast takeover.
I think maybe we should make a list!
Here's a list of theme park companies, or corporations with parks that are trading on the NYSE
Disney (DIS) last price 39.94
Six Flags (SIX) last price 57.34
Universal...parks jointly owned by NBC and
Blackstone, NBC jointly owned by Comcast (CMSCA 23.60) and GE (GE 20.04)
Cedar Fair (FUN) last price 17.73
Blackstone (BX) last price 15.94
Suprised that Six Flags is that high!
To Joshua, you ALWAYS want to invest in what YOU know and love.
Who knows more about the things that you know then you? Obviously you are interested in theme parks enough to visit this board. So you would know who is doing well, who is pleasing their customers, who has a bright future, etc. That knowledge would help you to know who to invest in and who not to. For example, looking at the comments on this board, you would have known that Six Flags was headed for trouble WAY before they filed for bankrupcy.
I invested in Disney, GE and Blackstone and Marvel because I love theme parks and comics. (I also hold Coke because I love soda) Both of those investments have done VERY well for me. Although both of those investments have been long-term investments. I started buying Disney starting in 2005 and I bought Marvel in 2006 and 2007 and held it until the end. And I have lost money when I invested in the latest "hot" stock that I knew very little about.
I invest and trade monthly so here are my favorites…
Not Theme Parks stocks…
OKE – natural gas pipelines in TX, KS, OAK
VZ – Verizon… Nice Dividend
Remember Buy High sell Low – or something like
that..
Disney or Universal are your best bet. U want a stock that is diversified in several markets. Six Flags, which is a bad stock, is only in theme parks. I used to think Sea World (Sea World and Busch Gardens) was good but, since they are no longer part of Anheuser-Busch, you no longer have the support of the beer money.
From Mike N
Posted January 25, 2011 at 4:28 PM
Invest in FUN. It still is a great deal and offers one of the best dividends in the whole tourism industry, not just theme parks. If you go for the long term, this is a great investment.
These days, don't invest any money you need to live on. Only invest what you could stand to lose, as many, many people found out the hard way.
Disney's done very well over the last 2 years. I'm hoping for a split at $45 or $50...
From Rob P
Posted January 26, 2011 at 4:44 AM
Only ever invest what you can afford to lose.
Theme Park stick is fun to play with. Invest only a certain amount and no more. Disney Stock is good and solid most of the time. But it tends to stay around the $35.00 dollor make give or take. Six Flags was interesting a few years back you could buy it on the cheap and now make a good return on it. ANd a lot of Theme Park Companies are prvite so you woont be able to buy into them. But good luck
I think the Six Flags stock is fools gold at 57. That value wasn't achieved organically, but rather through bankruptcy protection and subsequent reissue of stock. In short they screwed the smaller shareholders and gave the larger ones control of the company. The company is now run by a former head in the healthcare industry.
The Cedar Fair stock is indeed a pretty good buy at around 18. I think it will hit the 20's in the not too distant future. Disney is a pretty fair investment too, although the return might not be what people think it would be.
From Ben James
Posted January 26, 2011 at 11:13 AM
Anthony,
I was smart a few years ago when Six Flags was threatened with Delisting for stock value being below a dollar and I jumped on it.
I blew a whole paycheck buying stock and now it went from 35 cents per stock to over 53 bucks. I am glad I made the investment.
From James Rao
Posted January 26, 2011 at 11:36 AM
Ben... SELL SELL SELL!!!!
I'm trying to invest in technology specific to my career. I work in mechanical and aerospace engineering, so lithium, among others, is not just a temporary hot stock.
Thanks for all the great advice. Cedar Point seems like a steal.
Yeah Ben...then was definitely the time to buy. Now is not though, and the stock is peaking right now right after their "refinancing" and increased attendance/revenue figures for the year. It just won't stay up that high, especially when they have to start keeping those numbers up (later this year) Not saying it will completely tank again, but it won't stay around 60 (maybe will rest around 35-40 provided they don't completely screw up). They'll eventually have to start spending money again instead of simply cutting everything. They are smart for cleaning up their parks,getting rid of bad investments, restructuring, and saving the company, but their philosophy hasn't really changed, and neither have their offerings. Aside from being cleaned up a little and having money for maintenance now, they're still the same parks. The question becomes this. Will they once again slowly kill the company by letting the parks go to crap again, or will they change their ways and seek to truly entertain people. I'll be watching Six Flags stock very closely, and I'll have my finger resting on the sell trigger in about 6-8 months, after the majority of their season is complete.
A lot of companies are bouncing back big because they posted "gains". Many of the gains were really because the recession was over and the companies got back the business they lost. Those are the stocks you want...well known companies that haven't quite recovered from the economy but will do so eventually. Example...construction related companies. Check out the latest news on Caterpillar and their big 4th quarter. Certain retail stocks are worth looking at, and also bank stocks, which are dirt cheap right now. Risky, but cheap. The banks that make it out of this mess will be in a good position. In the theme park industry, Disney and Cedar Fair are the ones to look at.
Good predictions! Cedar Fair hit a new 52-week-high today of $22.26.
From James Rao
Posted May 10, 2011 at 8:29 PM
Yeah, we got one right. But we might have been wrong about Six Flags: they are paying a dividend and going to perform a stock split. But honestly, I still wouldn't touch their stock. I don't trust them.
American dividends are deregulated, so I doubt the announcement of one is any kind of indication of economic progression.
O Im happy with my six flags stock..Alright it my sink in the fall but...oh the return...
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