A Bold Prediction From Motley Fool for 2006

[rjholla2003]

From http://www.fool.com/news/commentary/2006/commentary06011807.htm

5. Six Flags will be one of the top stocks of 2006
With shares of Six Flags (NYSE: PKS) trading in the double digits for the first time in nearly four years, the market seems to be willing to give Dan Snyder and ESPN prodigy Mark Shapiro better than a fighting chance to turn the regional amusement-park operator around.

The stock may have tripled since bottoming out last year, but that doesn't mean the value of the company has tripled. This is an important distinction to make. Because the company's balance sheet is packing $2.1 billion in debt, the enterprise value of Six Flags has actually risen by just a little better than 50% to $3.5 billion. That's the beauty of leverage in a turnaround situation: The stock can double here in 2006, growing sixfold in two years, yet the company's enterprise value will have only doubled in that time.

Shapiro has his work cut out for him. Six Flags was able to grow attendance nicely in 2005, but now it's up to the new blood to keep the crowds coming back and giving them compelling reasons to spend more money once they're in.

A full 54% of the company's revenue is derived from admissions. Compare that with regional rival Cedar Fair (NYSE: FUN), which generates just 51% of its top line off admission tickets, and you can see the potential for Six Flags to grow its per-capita income. Can Six Flags get people to buy more souvenirs? Can it get guests to eat more? Can it create entertainment districts and build out adjacent resorts? I think so. With time and the right management team in place, the market may come to think so, too. It has to be careful, though. Improving customer service and marquee ride uptime while upgrading in-park concessions and entertainment is often easier said than done.