This stock is up 27% and still rising
Theme park operator Cedar Fair is the best house in a fantastic neighborhood.
Not all businesses are created equal. Some are simply better than others. That's what I kept thinking about Monday night on "Mad Money" after I interviewed Matt Ouimet, the CEO of Cedar Fair (FUN) -- with that fabulous ticker symbol, FUN. Shares of this company, with a 5.85% dividend yield, have already advanced 27% this year. I think it has a lot more upside to come, as well, simply because the business is routinely underestimated by all involved.
It shouldn't be. The business is just too great for anyone to ignore the stock here.
Cedar Fair is one of three pure play theme parks in this country, the other two being Six Flags (SIX) and the newly minted SeaWorld (SEAS). All of them offer above-average payout yields, but FUN has the most upside from earnings right now, simply because it's got the best and least recognized earnings power.
Shares of SeaWorld, which just came public, have already risen more than 30%. At the current price, this stock will have an appreciably lower yield than Cedar Fair, even with what could amount to a very similar growth rate. Six Flags, which is up a similar 27%, is set up for a good year. But it has not put through the innovations that Cedar Fair has put in -- both in rides and in technological infrastructure -- and, again, it has a lower yield than Cedar Fair.
That's why Cedar Fair is the best house in a fantastic neighborhood.
It wasn't always like this. Theme parks used to be terrible investments. There were too many of them. They were too labor-intensive. They were too seasonal. Their balance sheets were often loaded with debt, as anyone who remembers the pre-bankruptcy Six Flags.
Now they are all very well-capitalized. Cedar Fair's the best on that score, too, and these parks have become destination vacations for the value-conscious consumer -- which, after the Great Recession, is just about everyone. Plus, the season, through aggressive promotion, has been extended from Labor Day to Halloween at almost all of the non-Southern parks in the country. That means much better cash flow.
It also helps that there's just not enough land left to develop that many more competing parks. Meanwhile, the existing mom-and-pop shops have almost all folded up shop.
Cedar Fair has defied skeptics for years. I had recommended the stock when it was in the teens because my co-writer Matt Horween suggested the company was a cash machine that people simply weren't looking at correctly.
Anyway, despite the rally, I believe it's absurd to think that FUN, with that 5.85% yield, is done going up. I believe estimates are already too low, courtesy of what we learned Monday night in the interview. Cedar Fair had its greatest one-day opening in history -- at its Cedar Point park -- because of a new attraction, the GateKeeper, which was featured on "Good Morning America."
Numbers too low, yield too high vs. the other players -- and, yet, a better balance, sheet: What's not to like about FUN?
Jim Cramer is a co-founder of TheStreet and contributes daily market commentary to the financial news network's sites. Follow his trades for Action Alerts PLUS, which Cramer co-manages as a charitable trust and has no positions in stocks mentioned.
More from TheStreet.com
".It will blow over"
Why would you want the administration intimidating journalist to blow over? What kind of USA citizen would turn a blind eye to that?
Yes, it's perfectly NORMAL to repeat the same DIE , MANTRA, DIE on each and every post and in CAPS too !
No, nothing wrong with that. No "anger management" problems either , Regalman
All quite normal.
Wouldn't you just love to leave your kids with this Saint ?
I often wonder, WHO exactly should die ?
Is it the President or CEO ?
The VP's ? ALL of them - or just a few ?
The tellers ?
Don't you wish this ST would be more specific in his death wishes ?
ahh the looony , lefty, insecure , begging mind !
Grampa now GGrampa.....Usually likes to buy tickets and watch the line standers from a shade tree on a bench....Legs and Back you know..?
And he ain't gonna ride anything called the "Gatekeeper", that only means one thing to me....
A Three-Headed Dog and Monster..
I wander around looking for an "Innkeeper" that has a "Barkeeper"; Where all the other Oldies and Fraidy Cats hang out...Hotdog and Mug of Beer, $15 bucks...
But Grandma,(Miss Lilly) likes to ride the rides......Wahooooooooo!!!!
Barry, your hopes for an Obama waterloo are crazy.It will blow over.This isn`t Nixon you`re
talking about.4 Americans died in a snake pit country.This isn`t 3000 dying on 9-11.If
9-11 happened on a Dem watch our right wing media would call for impeachment the
same day.All the far right has is Benghazi and crazy conspiracies about Obama going
after the TEA PARTY.
It's a Muslim country , they hate us , coming on 10th anniversary of 9/11, the white house was WARNED several times , by several branches INCLUDING the ambassador and they did what ?
That's right , NOTHING. Zero.
Too busy running his mouth Bin Ladens Dead , Al Quida's in the run
We have MORE security in Paris, France THAN Libya.
Please- save the lefty talking points to more low info voters.
They will believe it. People with even half a brain and no agenda, want the truth
Lefty liars don't want to know, wish it would all go away.
Bush Lied , people died. Ring any bells, douche bags ?
Payback is a BEATCH !
Tell the kids Daddy's never coming back - BUT it was all make believe and Obuma was very sleepy that night !
It was so worth it, children
AND - when they grow up without a father , they can repeat the lefty mantra over and over :
Bin Laden's Dead !
GM's Alive !
Al Quida's on the run !
It has such a soothing effect.
I'm sure they wil be SOOO pleased too !
Listen, when a present and his henchman ALLOWS an ambassador and the embassy to be turned to dust, it's a big deal.
When a President and his henchman, do nothing to stop an attack, the "President" goes to bed and then REPEATEDLY lie about it. many , many , many times. All on tap[e, all clearly visible and it wasn't Bush (unless he got a real good tan and his ears grew 4 sizes ?) it IS a big deal.
When 4 Americans dies because of incompetence it IS a big deal.
Nixon got impeached for lying under oath (Hey so did Billy Boy, too !) and for using the IRS as his personal revenge team.
Speaking of the IRS, Obuma is nailed on this too. Somehow , some low level cretin in the "Cincinnati" office decided HE was goimng to go after those evil , white Tea party people and those evil white talk show commentators ?
Completely on his own ? No cajoling from Dear Leader , oh no.
Listen , some of you lefty cretins were KILLING Bush for 7.5 minutes, even yesterday the King of all lefty cretins "Regalman" brought up 7.5 minutes on 9/11.
HOWEVER 10 years later , our Dear Leader GOES TO BED, while we are under attack, it's all, good ?
No, no , no, you reap what you sew.
You can kiss Hillary chances in 2016 bye , bye . She's like a fart in the wind --------
Hopefully Dear Leader gets scolded and embarrassed at the least if not IMPEACHMENT which he so richly deserves.
He's NOT getting out of these 2 beauties.
Cedar Fair (FUN) being @ $44 apx....Is interesting, it's breaking new ground with higher and higher price...
Looking at a 10 year Chart (available here on MSN)...Might be a much better play in December...?
Off Season ??
Dec...2011 @ about $22.20
Dec...2012 @ about $32.50
Although it did crater in May of 2012 @ $25.50
Personal opinion, I think it demands more research and consider buying on a dip or lows..??
Instead of $44.....Even an article in January, would have given this some thought, considering it's historical averages...5 months later, Jim..!! Up today about 3% early on.
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
Stocks are facing some serious resistance as the bears tear into the market's respite.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.