#10 - Cedar Fair (NYSE:FUN)
Cedar Fair (FUN) RSI Score = 46.77
You’d have to be crazy to invest in a theme park like Cedar Fair (NYSE:FUN). I mean, you might be bullish on an entertainment giant like Disney (NYSE:DIS), but what is the attraction of investing in a stock like Cedar Fair?
Well, for starters, prior to the pandemic the company was delivering strong financial performance. Cedar Fair reported record net revenue and attendance for all of its parks was up 8%. But with theme parks closed down for the foreseeable future due to the Covid-19 pandemic, is all hope lost?
Not according to CEO Richard Zimmerman who has laid out a specific health and safety plan for Knott’s Berry Farm and other Cedar Fair properties. Some of the steps the company will take include advanced reservations, reduced attendance, virtual queueing, cashless transactions, and social distancing.
On a conference call with analyst, Zimmerman said, “I am confident that our industry and Cedar Fair specifically can develop and execute new operating procedures to address sanitization and social distancing best practices.”
About Cedar Fair
Cedar Fair, L.P. owns and operates amusement and water parks, as well as complementary resort facilities. Its amusement parks include Cedar Point located on Lake Erie between Cleveland and Toledo in Sandusky, Ohio; Knott's Berry Farm near Los Angeles, California; Canada's Wonderland near Toronto, Ontario; Kings Island near Cincinnati, Ohio; Carowinds in Charlotte, North Carolina; Kings Dominion situated near Richmond, Virginia; California's Great America located in Santa Clara, California; Dorney Park in Pennsylvania; Worlds of Fun located in Kansas City, Missouri; Valleyfair situated near Minneapolis/St.
Read More - Current Price
- $45.74
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 11 Buy Ratings, 1 Hold Ratings, 1 Sell Ratings.
- Consensus Price Target
- $55.92 (22.3% Upside)
One of the keys to investing in oversold stocks is to understand that in many cases, these are not stocks you are looking to hold for the long-term. There is a herd mentality to investing. Once the big money starts pulling out of a stock, individual investors start to head for the exits. This frequently creates a situation where the stock falls below its fair selling price.
However, this may simply be a short-term opportunity. Once the market finds its balance these stocks may get range-bound at their fair price.
Major events like the Covid-19 pandemic and the Great Recession, or even the tech wreck of late 2018, create buying opportunities for astute investors. When investors look at the market today, it may be hard to find value. You have to be willing to do a little digging to identify companies that may be slightly underperforming relative to the market.
The companies in this presentation may still face some headwinds, but they present some unique opportunities as the market continues to recover from the effects of the novel coronavirus.
More Investing Slideshows:
