Friday, December 11, 2009

Put some FUN in your portfolio

On Financial Tides every once in a while we see a stock that is hitting new highs like crazy for no apparent reason. Sometimes that movement precedes a big press announcement; sometimes it precedes an acquisition announcement. You can never tell. This week when screening for stocks hitting new highs consistently on BarChart Cedar Fair LP -- FUN came up on the radar. FUN has had price appreciation on 14 of the last 20 trading sessions. The stock was having a difficult time earlier in the year and seemed to bottom out on 11/12 at 6.03 and has steadily move up by all most 50% since then. Something is going on here.

Cedar Fair, L.P. and its affiliated companies own and operate five amusement parks: Cedar Point, Knott's Berry Farm, Dorney Park & Wildwater Kingdom, Valleyfair, and Worlds of Fun/Oceans of Fun. The parks are family-oriented, with recreational facilities for people of all ages, and provide clean and attractive environments with exciting rides and entertainment. The company also owns and operates four hotel facilities. Cedar Point also owns and operates the Cedar Point Marina, one of the largest full-service marinas on the Great Lakes.

Although there is not a major Wall Street brokerage following the stock has 1 buy and 3 hold recommendations with no sells or under performs. Analysts expect the stock to have an increase in both sales and EPS and be profitable in the coming year. Paul Price a contributor to Seeking Alpha has done several recent articles on the stock and I'm linking his article --
Cedar Fair : Growth Opportunities in Amusements for your review.

Over on Wall Street Survivor the Survivor Sentiment is 5/5 with a fundamental rating of 4/5. On Motley Fool the CAPS members think the stock will out perform the market 314 to 72 with the All Stars agreeing 76/23. Of the Wall Street columnist only Cramer disagrees but he hasn't said anything about the stock since all the way back in January.

Recommendation: Although FUN seems to have support based on its fundamentals and is expected to make a profit, I'm adding this stock to my speculative Marketocracy VMSLO portfolio solely on its technical price movement alone. Something is going to happen and I'm hoping for another price kick upward. Buy around 9 but have a protective stop loss around 8 in case nothing happens. Revisit that stop loss on a weekly basis and move it up to protect your gains.

Jim Van Meerten is an investor who writes on financial matters here and on Financial Tides. Please leave a comment here or email FinancialTides@gmail.com.

Disclosure: No positions in this stock at the time of publication

No comments:

Post a Comment