1. Presented by Aditi Das Jordan Peasel Yanan(Phoebe) Tan Chris Zakhem
NYSE: SIX
Presented by Aditi Das
Jordan Peasel
Yanan(Phoebe) Tan
Chris Zakhem
Presented on 12/8/2015

2. Agenda Screening Process Company Review Microeconomics Conditions
Industry Review
Recent Stock Performance
Financial Analysis
Financial Projection
Valuation
Recommendation

3. Screening Process Six Flags Market Cap: $4.88 B Piotroski’s Test: 6
Strong ROE
Diversification

4. Company Overview
Six Flags has over 800 rides, 130 of them are roller coaster rides
16 Theme Parks in the US
1 Theme Park in Canada
1 Theme Park in Mexico
Looking to add another in Mexico
Has rights to Bugs Bunny, Daffy Duck, Tweety Bird, Yosemite Sam, Batman, Superman, Yogi Bear, Scooby-Doo, The Flintstones for merchandise, advertisement and entertainment
2014 Annual Report

5. Company Review
2014 Annual Report; Bloomberg

6. SWOT Analysis Strong Diversification of services within Theme Parks
Exclusive rights on characters to be used in Theme Parks
Well Designed Website
High R&D Costs
High Sunk Costs
High Capital Expenditures
Dependence on Seasonal Workforce
International Growth through franchising in Europe and Asia
Discussions of new park in Mexico
Economic Recession
Rapid development in technology
Natural Disasters, contagious diseases, terrorism
2014 Annual Report; Bloomberg; El Financiero

7. Key Risks Economic Conditions Affect Third Party Contracts
Cyber Security Risks
Not Adequate Insurance Coverage
Economic Conditions Affect Third Party Contracts
Risks of Accidents
Intellectual Property must be protected
Other Leisure Alternatives
2014 Annual Report

8. Macroeconomics Conditions
Spending and Adolescents within the United States
Domestic and International Inbound Trips into the United States
IBIS

9. Industry Review Porter’s Five Forces IBIS Barriers to Entry
Threat of Substitutes
Bargaining Power of Suppliers
Bargaining Power of Buyers
Competitive Rivalry
Porter’s Five Forces
IBIS

10. Recent Stock Performance
Six Flags is currently trading above the 20 day and 200 day moving average
Yahoo! Finance

11. Recent Stock Performance
Out of its competitors, Six Flags is trading above
Yahoo! Finance

12. Financial Analysis
2014 & K

13. Financial Analysis
2014 & K

14. DuPont Analysis
2014 & K

15. Comparable Company Analysis
SeaWorld Entertainment, Inc. (NYSE:SEAS)
Operates as a theme park and entertainment company in the U.S.
Features marine-life theme parks in Orlando, San Antonio, and San Diego
Owns Busch Garden theme parks and other various theme parks across the U.S.
Cedar Fair, L.P. (NYSE:FUN)
Owns and operates amusement and water parks, as well as hotels in the U.S. and Canada
Operates 11 amusement parks, 3 outdoor water parks, and 5 hotels
Notable parks include Kings Dominion in Richmond and Cedar Point on Lake Erie
Merlin Entertainments plc (LSE:MERL)
Operates visitor attractions worldwide
Attractions include LEGOLAND, SEA LIFE, and the Dungeons
Headquartered in Poole, U.K.
Oriental Land Co., Ltd. (TSE:4661)
Operates and manages theme parks and hotels in Japan
Parks include Tokyo Disneyland and Tokyo DisneySea
Headquartered in Japan
Cap IQ

16. Greenblatt Ratios
Cap IQ

17. Comparable Company Analysis
We used P/E, P/Forward EPS, and P/Sales
Median multiples were selected and applied against SIX’s financial data
We equally weighted each of these multiples for a valuation of $40.35
Bloomberg; Cap IQ

18. Revenue Projection
2014 & K

19. WACC Calculation Risk Free Rate: US 10-Year Treasury Note
Adjusted Cost of Equity: 80% of CAPM Cost of Equity + 20% of Realized Return for past 2 years
Cost of Debt: From the projected debt schedule
Bloomberg

20. Discounted Cash Flow
2014 & K

21. We recommend adding Six Flags to the Watch List
Recommendation
Positives: Dividend Yield is 4.42% & New Market Growth; Negatives: High and Volatile PE Ratio
Current Stock Price
Comparable Value
DCF Valuation
$52.55
$40.35
$47.06
We recommend adding Six Flags to the Watch List