Six Flags Entertainment Corp. (NYSE:SIX)

CAPS Rating: 2 out of 5


Player Avatar TMFDeej (99.32) Submitted: 1/30/2011 9:07:09 PM : Outperform Start Price: $14.30 SIX Score: +83.53

First up we have a number of post-bankruptcy investment ideas that were presented by Roundtable member Meryl Witmer. Let me begin by saying that one would have been much better off investing in all of these companies several weeks or even several months ago because they all have run up significantly since emerging from bk. IDEA 1: Six Flags Entertainment [SIX] Special Situation: Emergence from BankruptcySix Flags, the operator of theme parks such as Great Adventure, emerged from bk in May of last year. If one had invested in it right when it re-listed on a major exchange, they'd be sitting on a solid 50%+ gain, even better than that from the 52-week low that was established a month or to later. Current Price: $59Target Price: $75Key Points- The company said replacement value for its assets is $5 billion to $6 billion. - Company's new CEO, Jim Reid-Anderson, has been successful at turning around bankrupt companies in the past. - New CEO's compensation package depends upon how well the company performs, specifically Ebitda. If he can increase SIX's Ebitda to $350 million, he will receive 1.25% of the stock.- This goal can be achieved by merely increasing the company's profitability by $3 per visitor.- Moved company HQ from New York to Texas, saving $16 million annually. Six Flags gets about 25 million visitors a year, each spending about $36, all in. - Other catalysts include potential for international licensing and 1,000 undeveloped acres.- Company's loss carry-forwards enable it to avoid paying taxes for the next 10 years.Deej

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