Why Six Flags Entertainment Stock Lost 11% in March

MarketsMotley Fool

What happened

Six Flags (NYSE: SIX) stock trailed the market last month by shedding 11% compared to a 1.8% uptick in the S&P 500, according to data provided by S&P Global Market Intelligence.

Continue Reading Below

The decline put the theme park specialist at a one-year low, with shares down nearly 20% in the past 52 weeks.

So what

Two events weighed on shares last month. First, investors continued digesting fiscal fourth-quarter results that, while securing the company's ninth consecutive year of record sales, still failed to meet expectations. Shareholders were also rattled by news that CEO James Reid-Anderson plans to retire by early next year. Six Flags credits him with setting a new strategic direction for the company and helping boost key operating and financial metrics.

Now what

Six Flags is on the hunt for a new chief executive, and so shareholders will have to accept extra uncertainty until they learn more about Reid-Anderson's successor. The good news is the new boss isn't facing significant operating challenges, given that attendance rose 5% last year and in-park spending also ticked higher by 2%. These gains don't remove the risk associated with investing in a cyclical industry like theme parks, but they do show that Six Flags has many levers it can pull to keep earnings rising while the economy expands.

10 stocks we like better than Six FlagsWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has quadrupled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Six Flags wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

*Stock Advisor returns as of March 1, 2019

Demitrios Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.