You Must Be This Tall To Invest In Cedar Fair

[The Interpreter]

http://www.fool.com/investing/dividends-in...cedar-fair.aspx

[Cory Butcher]

Thats an interesting article.

Personally, I do not give much creedence to the idea that 5% revenue growth is an alarming reason for concern. Yes its not a 25% increase, but its not a loss, it is a gain....a VERY small gain. Now, yes with Cedar Fair's dismantling of Geauga Lake, Accounting wise, I think I read that they lost over 20% net income for the quarter.

I have always been of the belief that a win is a win, an ugly win is a win, and a blowout win is a win. So, like in football, "Just win baby!" In applying that to this situation, the bottom line is they didnt lose, in fact they gained. They increased Cap EX, are installing more rides across sound parks than they ever would. It is almost like they have a cap ex of 135 Million by recycling GL's rides.

As the article above states, gains were minimal, but the strategies in place for now are working; softer attendance is creating better yields per guest via in-park spending. Also one thing that speaks VOLUMES to me, is that CF still hasn't decided to cut-off quarterly distributions, which by all accounts in standard business practice is what you do when you need to pay off debt fast, or finance ambitious growth plans. Why does this speak volumes? Simply put, they obviously strongly believe that what they have in place works, and the one thing above all else that you need to WIN is confidence. I am convinced CF has that confidence, and that investors and park goers will to!

[The Interpreter]

You are forgetting they borrowed enough money to ensure they could continue distributions. And during the conference call, Mr. Kinzel noted in passing that the covenants to creditors strengthen significantly next year.

[KDCOASTERFAN]

Thats an interesting article.

Personally, I do not give much creedence to the idea that 5% revenue growth is an alarming reason for concern. Yes its not a 25% increase, but its not a loss, it is a gain....a VERY small gain. Now, yes with Cedar Fair's dismantling of Geauga Lake, Accounting wise, I think I read that they lost over 20% net income for the quarter.

I have always been of the belief that a win is a win, an ugly win is a win, and a blowout win is a win. So, like in football, "Just win baby!" In applying that to this situation, the bottom line is they didnt lose, in fact they gained. They increased Cap EX, are installing more rides across sound parks than they ever would. It is almost like they have a cap ex of 135 Million by recycling GL's rides.

As the article above states, gains were minimal, but the strategies in place for now are working; softer attendance is creating better yields per guest via in-park spending. Also one thing that speaks VOLUMES to me, is that CF still hasn't decided to cut-off quarterly distributions, which by all accounts in standard business practice is what you do when you need to pay off debt fast, or finance ambitious growth plans. Why does this speak volumes? Simply put, they obviously strongly believe that what they have in place works, and the one thing above all else that you need to WIN is confidence. I am convinced CF has that confidence, and that investors and park goers will to!

True but remember,SFI was overconfident in their business strategy as well & look at what it got them....a huge debt & a change in ownership.

[The Interpreter]

And a mountain of debt SIX is STILL trying to get out from under.

How'd the market take the FUN quarterly results and conference call? Well, FUN was down more than seven percent today...and closed at the low for the past 52 weeks.

An interesting chart of the unit price:

http://money.cnn.com/quote/quote.html?symb=FUN&time=5yr

[Cory Butcher]

Actually I didn't forget about the loan they took out to cover their debts, I think that if they feel that strategy starting to go by the wayside then they will end distributions...or sell parks. As of now they havent done either which as I stated shows to me they are commited still to their strategy.

I also understand the leash on their debt tightening considerably around their neck in the next succesive years. They could be feeling that anxiety now, or they may not. They probably are, but since they havent sold any parks that we know of, and havent ended the distribution, I have a positive outlook.

I simply felt no need to inject more analysis of how the loan to cover debts, and other instances could bring down the strategy, I wished to prove that those would not matter judging by what I have seen so far, and thus omitted those details!

In hindsight however I could have made my stance much more inclusive, and should have, so thank you for the learning experience!

[The Interpreter]

And to be fair, that same chart over at SIX looks remarkably similar, if not a bit worse:

http://money.cnn.com/quote/quote.html?symb=SIX&time=5yr

Friday will be interesting...

[jzarley]

Of course, the DOW was also down more than 300 points today, so there's a lot going on the in markets right now that go way beyond a few small cap theme park companies

[The Interpreter]

True, but that is a bit more than two percent down on the Dow, FUN was down quite a bit more than the market at large...and SIX, by comparison, closed down less than three percent, though it has taken a beating of its own in the past few weeks.

[jzarley]

What is so amazing is the dramatic reduction in market cap for both SIX and FUN...SIX's market cap is less than $300M now--that's less than what Paramount paid for the four US KECO parks in '92. Cedar Fair's market cap has dropped from around $1.5B prior to the Paramount acquisition, down to just $1.2B a year afterward.

I'm almost surprised there haven't been any shareholder lawsuits filed yet...(not that I think they're necessarily deserved, but just know the crankiness of shareholders...)

[Monroe]

^I'M NOT CRANKY!!!!