3SOF

nice pick David

Quote from: la-onda on December 07, 2007, 11:30:24 PM
nice pick David

Thanks la-onda

QuoteI bought yesterday at $2.12 with the expectation of at least a 50% gain potential over the short term.

Well, you didn't get 50% Aussie (not yet), but at one point on Friday you were making 36.8% in just about SIX trading days

Anyway, the stock fell back quite sharply on the day, from a 14.2% gain to a 1.2% gain. Short term gains were too big and the stock touched a meaningful technical resistance, which is the 50 days SMA (red on the chart below).

But, the 17 insiders who bought shares at prices ranging $1.90 and $2.2 certainly didn't sell. They bought because they believe in the success of the company's turnaround and they're putting big money into their beliefs. If indeed SIX's turnaround is successful the stock will be at least at $6 a share in late 2008.

I'm also a believer and I'll keep holding SIX for the long term.

Citigroup disclosed a 10.3% ownership in SIX yesterday:

SCHEDULE 13G

They used to own 8.7% of SIX, so they took advantage of the recent sell off to increase their stake.

I've been downplaying the importance of the "SIX Flags park tragedy", just because I think it's sad but normal that with more than 26 million visitors annually some people inevitably get hurt or even die inside the parks. I've googled this issue and found out that the tragedy was that a 13 year old girl got both her feet cut off by a loose cable.

Of course this is horrible, but not a reason to cut SIX's market cap by 67% or the equivalent to $380 M. It goes to show the power media, especially TV networks, have these days.

After a 9% drop in attendance in July (SIX's strongest month of the year and the accident's month), by September everything got to normal and attendance was up 8% from September 2006.

I believe the whole fall from $6 to $2 was unwarranted and we'll at least see $6 a share during the course of 2008. If the company's turnaround plan really works, with a 6.5% rise in attendance versus 2007 (it won't be that hard, since 2007 had these problems), we may see something like $8-$10.

Plenty of reasons not to sell around the 50 days SMA. Not this time. I'll keep holding SIX for the long term.

"FED cut 25 bp instead of 50: Let's sell some more shares to Citigroup and insiders, so that 12 months from now they have a 200% profit instead of us".

We continue to witness a fight between the bulls and the bears in SIX's shares. The bulls buy because the previous 67% haircut was without merit, due to temporary effects, as is also evidenced by the insiders activity. The bears sell because the chart says sell, and they use the 50 days SMA as reference.

I believe the bulls have much more valid reasons than the bears and they will ultimately win this fight. The jury is out now.

I'll hold SIX.

Some headline risk on this one still.

         

AP
Witness: No Auto Shut-Off on Ride
Wednesday December 19, 11:49 am ET 
Witness: Ride That Severed Girl's Feet Had No Auto Shut-Off in Case of Cable Break


LOUISVILLE, Ky. (AP) -- An amusement park ride where a girl's lower legs were severed by a broken cable was not designed to stop automatically in case the cable snapped, the park's maintenance chief said in a deposition.
ADVERTISEMENT


Kaitlyn Lasitter, 14, and her family are suing Six Flags Kentucky Kingdom over the June 21 accident on the Superman Tower of Power. One of Kaitlyn's feet was reattached but the other could not be saved. She has begun walking with a prosthetic leg.

John Schmidt, ride maintenance manager for Six Flags Kentucky Kingdom, said the ride should have been designed differently.

"So if a cable breaks the ride will keep operating as if nothing happened?" attorney Larry Franklin asked Schmidt in the Nov. 30 deposition that was released Tuesday.

"Yes," Schmidt answered.

The ride, which was closed after the accident, lifted passengers 177 feet, then dropped them at speeds of more than 50 mph.

The cause of the break has not been determined. Lawyers for both sides have not agreed on a laboratory to conduct tests.

Carolyn McLean, a spokeswoman for Kentucky Kingdom, said she could not comment on ongoing legal proceedings.

Schmidt said the ride's cables were visually examined twice a week, measured by inspectors once year, and changed every three to four years, if not sooner.

QuoteSome headline risk on this one still.

Yes, SIX will surely have to pay a few millions to settle this case. But it sure won't have to pay $380 M, which was what SIX lost in market cap terms almost exclusively due to this accident.

For SIX to go back up to $6 a share in 2008 what we need is the following:

«At the conclusion of his discussion, Mr. Speed noted that assuming 2% growth in guest spending per capita, flat sponsorship and other revenues, a cash cost base of $605-$615 million and capital expenditures of approximately $100 million (noting that $100 million plus or minus $10 million will continue to be the Company's run rate), the Company would need to generate attendance of approximately 26.3 million (an increase of 6% from the expected 2007 level) to achieve free cash flow break-even. As a matter of reference, Mr. Speed pointed out that 26.3 million is approximately one million less than the seven-year average attendance for the Company's current portfolio of parks.»

Since in September attendance was already up 8% from the 2006 levels (when the media deviated its attention from the accident), I believe a 6% rise in attendance in 2008 is achievable.

I'll keep holding SIX for the long term.

Any opinions on six? Havn't bought yet,always thinking it would retest the lows.$2.00? $1.90? Lower? We'll see.

There is probably a good portion of their parks closed due to the seasonality, so public may still be lacking enthusiasm related to this investment. I got in but now think SIX will hang around these levels for a while.

wouldn't this be the perfect time to buy? when everyone else hates it? I am putting an probing order in if it goes my way I'll add some more other wise I'll sit tight until it does.
Happy new year guys!

Quote from: soxguy on December 28, 2007, 10:55:01 AM
Any opinions on six? Havn't bought yet,always thinking it would retest the lows.$2.00? $1.90? Lower? We'll see.

Yes, retesting the lows to make a symmetrical pattern like a double bottom would be fine. I just hope/expect that we don't make an inverted H&S bottom instead, because if that were the case the stock would go lower than $1.91 on the current move.

I think we'll stop going down sooner rather than later, because there will be less selling pressure in this second "valley", because people now know that there has been heavy insider buying in the $2 area.

In their outlook for 2008, management said the following:

«Generating corporate cost savings from the 2007 completion of third-party consulting engagements related to managing seasonal labor, redesigning the Company's website, market segmentation and pricing analyses, and reduced outside legal costs due to recent litigation settlements.»

Well, at least what we can see, they already did, take a look at SIX's new website: http://www.sixflags.com/

Technically we'll need to close above the 50 days SMA to turn bullish. That moving average currently stands at $2.54. Fundamentally I continue to believe the stock went down from $6 to $2 for what was essentially a temporary event and everything should get back to normal from an operational standpoint in 2008, therefore the stock should move back up from $2 to $6.

I'll keep holding SIX for the long term.

Bought some mon. at 2.01 after it bounced off of 2.00 for the third time. Hopefully that was the right thing to do.

Quote from: soxguy on January 02, 2008, 09:46:53 AM
Bought some mon. at 2.01 after it bounced off of 2.00 for the third time. Hopefully that was the right thing to do.

I guess it will be right or not depending on your investment time frame.

Considering this paragraph from Fitch:

«Recent performance has been softer than expected with attendance flat and revenue up only 2% for the nine-months period ended Sept. 30, 2007. Fitch recognizes that third quarter performance (attendance down 3%) was negatively affected by a particularly weak July, Six Flags' highest attendance month. July appears to have been negatively impacted by weather and negative publicity regarding a high profile safety tragedy in June at one of its parks. It is not clear whether July was an anomaly or whether it is indicative of a poor strategy/execution, however, with attendance up for all other reported periods in the year, there appears to be some evidence that management's strategy could have a positive affect on operations. We recognize that the significant operating leverage in the business means that increases in attendance and revenue can have more than an estimated 2 times (x) the percentage increase for EBITDA (and an even greater affect after if adjusted for management's goal of $50-60 million in cost cuts).»

Because of a weak July due to one time events we get the chance of buying SIX for 1/3 of its value, in my opinion. I think SIX will be around $6 in the 4th quarter of 2008.

Whether it goes down to $1.5 between now and then is almost unpredictable. Since insiders bought a significant amount of shares around $2 I believe this is a good price to get in. Not sure if it is the long term bottom, though.

I'll keep holding SIX for the long term.

Good news out for SIX:

• Six Flags Reports Fourth Quarter Revenue and Attendance
PR Newswire (Tue 8:30am)

This looks promising:

«As of December 31, 2007, advance sales of 2008 season passes increased by a significant double-digit percentage compared to the number of 2007 season passes sold as of December 31, 2006.»

«In light of the fourth quarter performance, the Company expects it will slightly exceed its prior guidance.»

Insiders have been buying for a good reason - 2008 turnaround is in place.

The stock is up about 5% in pre-market trades. The "crucial" technical level of the 50 days SMA currently stands at $2.42. I believe that over the long term the fundamentals will win and we'll see SIX back up to the $6 level.

DJ Six Flags 4Q Rev $111M Vs $104M >SIX


DOW JONES NEWSWIRES
Six Flags, Inc.'s (SIX) fourth-quarter revenue rose about 7% to $111 million from $104 million.
The company said its attendance for the quarter was up 4% from a year earlier.
As a result, the company said it "expects it will slightly exceed" its previous forecasts for fourth-quarter financial results.
In November, the company had reported total revenue down 2% to $465.2 million and attendances down 3%, reflecting unfavorable weather conditions.
-Michael Kitchen; 415-439-6400; [email protected]

(END) Dow Jones Newswires
January 08, 2008 08:46 ET (13:46 GMT)
Copyright (c) 2008 Dow Jones & Company, Inc.- - 08 46 AM EST 01-08-08
                     Good news?