NEW YORK (TheStreet) -- TheStreet's Jim Cramer encourages investors to embrace "the new frugality" and suggests several stocks that reflect this theme.
Firstly, Cramer points out "people just aren't spending the way that they used to" in the wake of the Great Recession. Therefore, he suggests Cedar Fair (FUN) and Six Flags (SIX), two theme parks that yield almost 5%. He also points out people often go on Priceline.com (PCLN) to get these cheaper vacations.
For shopping, Cramer notes people are going to TJX Companies (TJX) stores such as T.J. Maxx because they realize they can get significant bargains there.
"We rate CEDAR FAIR -LP (FUN) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 3.4%. Since the same quarter one year prior, revenues slightly increased by 7.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Compared to its closing price of one year ago, FUN's share price has jumped by 33.84%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, FUN should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market, CEDAR FAIR -LP's return on equity significantly exceeds that of both the industry average and the S&P 500.
- CEDAR FAIR -LP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CEDAR FAIR -LP increased its bottom line by earning $1.94 versus $1.81 in the prior year. This year, the market expects an improvement in earnings ($2.91 versus $1.94).
- Net operating cash flow has decreased to $7.50 million or 18.35% when compared to the same quarter last year. Despite a decrease in cash flow CEDAR FAIR -LP is still fairing well by exceeding its industry average cash flow growth rate of -33.04%.
- You can view the full analysis from the report here: FUN Ratings Report
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