• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Doug Kass
    • Bruce Kamich
    • Jim Cramer
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Consumer Discretionary

One FUN Business

Theme park operator Cedar Fair is the best house in a fantastic neighborhood.
By JIM CRAMER
May 14, 2013 | 07:23 AM EDT
Stocks quotes in this article: FUN, SIX, SEAS

Not all businesses are created equally. 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 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.

Nice score!

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?

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

At the time of publication, Action Alerts PLUS, which Cramer co-manages as a charitable trust, had no positions in the stocks mentioned.

TAGS: Consumer Discretionary | Investing | U.S. Equity

More from Consumer Discretionary

An Entertainment Giant and a Big Drugmaker Present Buy Setups

Carolyn Boroden
Jan 26, 2021 8:30 AM EST

The stocks of Walt Disney Co. and Pfizer seem to offer nice upside potential based on their technical patterns.

Logitech Could Decline Further From Here

Bruce Kamich
Jan 20, 2021 8:50 AM EST

A stock that declines in the face of what appears to be bullish news tells us something.

Boot Barn Gets a Quant Upgrade: Do the Charts Fit?

Bruce Kamich
Jan 19, 2021 1:53 PM EST

Here's our latest analysis and trading strategy for the shares.

Signet Jewelers May Retest the Breakout From Its Base Pattern

Bruce Kamich
Jan 15, 2021 8:09 AM EST

There is a risk of a pullback to the top of the base pattern or down to the $30 area.

Norwegian Cruise Lines Fights to Survive

Jonathan Heller
Jan 13, 2021 11:00 AM EST

The markets appear to be looking forward for the cruise industry.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 11:48 AM EST STEPHEN GUILFOYLE

    Cashing in Some More Chips at Stocks Under $10

    We're trimming a position for a big gain today.
  • 08:34 AM EST GARY BERMAN

    Wednesday Morning Fibocall for 1/27/2021

    The "correction" can be coming sooner than we thou...
  • 09:35 AM EST CHRIS VERSACE

    Another Big Winner for Stocks Under $10

    We're ringing the register Tuesday morning.
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2021 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login