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Bear of the Day: Six Flags (SIX)

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With the economy rocking and rolling, summer vacations were more fun than ever. Folks were out there buying boats and RVs, taking family vacations to Europe, and enjoying theme parks. You may think that this bullish momentum helped out industries like Leisure and Recreation Services. After digging into the numbers, I myself was shocked to see that this industry actually ranks in the Bottom 14% of our Zacks Industry Rank. That means that individual companies within that industry have been seeing negative earnings estimate revisions coming in from analysts. That, typically, is not what you want to see when looking for your next stock to buy. That’s why I’m naming Six Flags Entertainment SIX as today’s Bear of the Day.

Six Flags Entertainment Corporation owns and operates regional theme and water parks under the Six Flags name. The company's parks offer various thrill rides, water attractions, themed areas, concerts and shows, restaurants, game venues, and retail outlets. It owns and operates 25 parks, including 22 parks in the United States; 2 parks in Mexico; and 1 park in Montreal, Canada.

The company is currently a Zacks Rank #5 (Strong Sell). The reason for the negative Zacks Rank is the recent string of negative earnings estimate revisions coming from analysts. Over the last ninety days, nine analysts have cut their estimates for the current year and next year. That bearish attitude has dropped our Zacks Consensus Estimate for the Current Year from $2.76 down to $2.59. Next year’s number has come down from $3.00 to $2.79.

That bearish sentiment has gone through the rest of the industry, which is why it’s not in the good graces of our Zacks Industry Rank. Several names in the industry are Zacks Rank #3 (Hold) stocks, including AMC Entertainment (AMC - Free Report) . There is one Zacks Rank #2 (Buy) in the industry to inspect further. That’s Studio City MSC. The positive Zacks Rank is a great place to start if you’re looking for stocks with strong earnings trends.

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