Six Flags: Market Thrills

10/29/2015 8:00 am EST

Focus: STOCKS

Leo Fasciocco

Investment Columnist and Publisher, Ticker Tape Digest

Our latest featured breakout stock operates regional theme and water parks, explains Leo Fasciocco, editor of Ticker Tape Digest.

Six Flags (SIX), based in Grand Prairie, Texas owns and operates 18 parks, including 16 parks in the United States, one park in Mexico City, and one park in Montreal.

Technically, the stock has broken out from a seven-month, cup-and-handle base. The move carries the stock to a new all time high. That is bullish.

The company has gone through two 2-for-1 stock splits. Even though its business tends to be seasonal, the stock has done extremely well.

SIX's 12-month performance chart shows the stock appreciating 55% versus a 6% gain for the S&P 500 index.

The stock's momentum indicator is strongly bullish. The accumulation-distribution line compliments the price action.

This year, analysts are forecasting a 113% surge in SIX's earnings to $1.62 a share from 76 cents a year ago.

The next two quarters are seasonally weak. However, SIX should show an improvement.

For the upcoming fourth quarter, analysts look for a loss of 3 cents a share compared with a loss of 38 cents a year ago. The highest estimate is a profit of six cents a share.

Going out to 2016, the Street is forecasting a more modest 10% increase in net to $1.78 a share from the anticipated $1.62 this year.

Institutional sponsorship is very good. The largest fund buyer recently was the 4-star rated RS Select Growth A Fund, which purchased 343,660 shares as a new position. Also, the 5-star rated Janus Triton D Fund was a recent buyer of 37,041 shares.

We are targeting SIX for a move to $60 off this breakout. A protective stop can be placed near $58.

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