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10 Stocks That Won’t Exist in a Decade

Change is a constant in the public markets ... but these 10 stocks likely won't be on the public markets 10 years from now

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Stocks That Won’t Exist in a Decade: SeaWorld (SEAS)

The Way Out: Bankruptcy OR Buyout

SeaWorld Entertainment Inc (NYSE:SEAS) simply hasn’t recovered from the bad publicity generated by the 2013 documentary Blackfish. SEAS stock hit an all-time low in late 2016, and though shares have recovered somewhat, they’re heading south again after a difficult year. Profit declined 8% last year, with attendance down 2.1%.

The problem for SeaWorld is that its fixed-cost base is incredibly high, which means lower attendance reads across to sharply lower profits. And with its leverage ratio nearing 5x, interest expense is a significant issue as well.

SeaWorld may have a savior: Chinese firm Zhonghong Zhuoye acquired a 21% stake in the company last March. And if the company can stabilize its business, larger theme park operators like Six Flags Entertainment Corp (NYSE:SIX) or Cedar Fair, L.P. (NYSE:FUN) could be interested.

That’s a big ‘if’ at the moment, however, and if SeaWorld can’t stop attendance declines, a sale could be forced upon the company. Either way, on its current trajectory, SeaWorld Entertainment is going to need cash from somewhere. That implies a likely sale – either before, or after, bankruptcy gets close.

As of this writing, Vince Martin did not hold a position in any of the aforementioned securities, but may take a long position in BREW stock this week.


Article printed from InvestorPlace Media, http://investorplace.com/2017/04/10-stocks-that-wont-exist-in-a-decade/.

©2017 InvestorPlace Media, LLC