Summer Stocks to Buy: Cedar Fair, L.P. (FUN)
Cedar Fair, L.P. (FUN), an owner of several theme parks, has had quite a ride over the past few years. In 2010, as the financial crisis withered consumer spending, it appeared FUN stock was going to be taken private by Apollo Management for around $11 per share. But shareholders screamed in protest, and the buyout was abandoned.
FUN stock shareholders are patting each other on the back, as the company roared back to life. Today, FUN stock sits just below $55 and it pays a 5.1% dividend to its loyal shareholders
Things are so good for FUN stock that it was able to issue $450 million in unsecured senior notes, replacing debt at 9.125% with new debt at only 5.375%. That will save the company almost $17 million per year in debt service.
FUN stock owns 15 different parks and five hotels (including my local attraction, Knott’s Berry Farm). Theme parks do very well in summer, and there’s been no sign of consumers abandoning that tradition. It remains a value proposition even to middle-class consumers, and FUN stock’s geographic diversification means families don’t necessarily have to travel across the country to get to one of its properties. No matter how you look at it, FUN is a great summer stock to buy.