Vacations — Americans love them, but they often don’t take enough of them. Part of that has to do with the fact that the U.S. doesn’t guarantee vacations. According to Fox News, we’re well in the minority on this issue. Furthermore, one in four Americans don’t receive any paid time off. Based on this statistic, it’s questionable why entertainment stocks would find themselves on a “stocks to buy” list.
However, do a little digging and the answer becomes much more apparent. According to data aggregated by Statistic Brain, 45% of Americans take a summer vacation. Of that figure, 91% are vacationing via their personal vehicles. The average one-way distance traveled for vacation is 284 miles. Naturally, this mileage jumps significantly during summer holidays. That’s perfect for major entertainment stocks, which have locations all over the country.
Then there’s the matter of locale. Among popular vacation destinations, Florida is the top dog, followed by California. Not coincidentally, the biggest entertainment stocks have their prime assets located in these two states. With summer steadily approaching us, the industry is heading towards its most profitable season of the year.
Finally, this year is different from the recent ones in our calendar. Whether you want to attribute it to President Trump or the eight years of the Obama administration, Americans are finding work again. It wouldn’t be surprising to find out that more Americans took advantage of vacation time. The last few years were rough for many families, and they could use a pick-me-up.
With summer mere months away, here are three entertainment stocks to buy.
Entertainment Stocks to Buy: Dave & Buster’s Entertainment, Inc. (PLAY)
For me, it came down to a Darwinian impetus. If I wanted to give myself the best chance of avoiding becoming a male version of a “cat lady,” I had to give up my video game addiction. Fortunately, Dave & Buster’s Entertainment, Inc. (NASDAQ:PLAY) came to prominence to save my sanity.
This is the beauty of Dave & Buster’s. Of all the entertainment stocks to buy, PLAY stock made video games great again. Similar to the ascendance of Donald Trump, this is no small feat. Even with their infiltration into mainstream popular culture, video games are still considered rooted in “nerdism.” PLAY, though, made it more than acceptable for grown men to live out their digital fantasies. Best of all, you could invite women without stigma — a win-win in my book!
Clearly, I’m not the only one that feels this way. Wall Street is seriously loving Dave & Buster’s stock. Last year, shares of Dave & Buster’s returned over 35%. This year, PLAY is looking to repeat that performance, ending the first quarter up 8.5%. As the meatier season of its industry is just over the horizon, this nerd friendly company has major upside potential.
And with steady gains in the labor market, entertainment stocks are definitely in PLAY!
Entertainment Stocks to Buy: Six Flags Entertainment Corp (SIX)
This isn’t just hype. According to a readership poll conducted by USA Today, SIX was voted as America’s favorite theme park.
It’s extremely unlikely that any company will take away that crown. For decades, SIX prided itself in developing some of the world’s cutting edge roller coaster rides. That heritage of excellence continues to this day, with attractions such as Tatsu, “the tallest, fastest and longest flying coaster on Earth,” according to Six Flags’ website. Furthermore, SIX isn’t just for adults. The company offers plenty of attractions that are perfect for young children, making Six Flags a family-friendly affair.
SIX stock had a solid outing in 2016, rewarding investors with a near-16% move. This year, shares are down nearly 2%. However, this is more likely a consolidation from its last robust rally. Between September of last year until the end of December, SIX stock jumped nearly 26% in the markets. Inevitably, a cool down period must occur.
For the shrewd investor, the slowdown is a perfect time to acquire one of the best entertainment stocks to buy.
Entertainment Stocks to Buy: SeaWorld Entertainment Inc (SEAS)
“Blackfish” was particularly damning for SeaWorld for two reasons. First, the documentary poignantly portrayed orcas as having human-like intellect and emotions. Audiences were drawn into this powerful characterization, and SEAS immediately became a black eye as a result. Second, the use of orcas as sideshows completely contradicted SeaWorld’s multiple humanitarian efforts. People wondered whether SEAS was just lying about their kindheartedness for all these years.
Not surprisingly, SEAS stock collapsed in the aftermath. At one point, shares fell briefly into the $11 range last year. But between mid-September of 2016 till the year’s end, SeaWorld jumped a whopping 50% in the markets. Currently, SEAS is in a consolidation phase. However, one thing is clear — investor confidence is back.
For this year’s redemption story among entertainment stocks, take a good look at SEAS.
As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities.