Investing

5 Stocks to Buy That Could Be Huge Summertime Winners

Lee Jackson

Published: May 29, 2018 8:10 am

Last Updated: January 11, 2020 11:04 pm

It’s right around the corner. With Memorial Day, the unofficial start to the summer season behind us, the first real day of the new season is a short three weeks away on Thursday, June 21. With school soon to be out in most parts of the country, families are getting ready for the annual exodus to all points north, south, east and west for fun and vacations. With gasoline prices rising, but still not too onerous, you can bet that even more families will be hitting the road or the skies for destination vacations.

In addition, many homeowners are getting ready for summer projects to enhance the value and enjoyment of home ownership, and that caters well to the big retailers that fill the needs of gardeners, home repair enthusiasts and more.

We screened our 24/7 Wall St. research database and found a host of top companies that should do great over the next 90 days. Many are rated Buy by the top firms we cover.

Cedar Fair

Plenty of families will be heading to this top company’s theme parks this summer. Cedar Fair L.P. (NYSE: FUN) is an operator of regional amusement parks. It operates within a segment of amusement/water parks with accompanying resort facilities. As of December 31, 2016, the company owned approximately 11 amusement parks, two separately gated outdoor water parks, one indoor water park and five hotels.

The amusement parks include Cedar Point, located on Lake Erie between Cleveland and Toledo in Sandusky, Ohio; Knott’s Berry Farm, near Los Angeles, California; Canada’s Wonderland, near Toronto, Canada; Kings Island, near Cincinnati, Ohio; Carowinds, in Charlotte, North Carolina; Dorney Park & Wildwater Kingdom (Dorney Park), in Allentown, Pennsylvania; Kings Dominion, near Richmond, Virginia; California’s Great America, in Santa Clara, California; Valleyfair, near Minneapolis/St. Paul, Minnesota; Worlds of Fun, in Kansas City, Missouri; and Michigan’s Adventure, in Muskegon, Michigan. It also manages and operates Gilroy Gardens Family Theme Park in Gilroy, California.

Cedar Fair investors are paid a sizable 5.4% distribution. Stifel has a Buy rating and a $78 price target on the shares. The Wall Street consensus target price is $75.33, and the stock closed last Friday at $65.98 a share.

Disney

This top consumer media company has multiple streams of income to push revenue, and it is a top pick at RBC. Walt Disney Co. (NYSE: DIS) stock continues outperforming on a near-term and long-term basis. With the movie studio business poised to improve, as with accelerating theme park business, the network programming continues to drive viewership with extensive sports programming. Combining that revenue growth with the company’s solid media networks and interactive presence, and 2018 revenue estimates could be conservative.

Many on Wall Street feel that the company’s distribution leverage and optionality, as well as its concentration of valuable intellectual property, will only improve with the acquisition of 21st Century Fox assets. Although, it should be noted that Comcast looks prepared to counter the Disney bid. Another plus is Disney’s continued impressive theatrical momentum.

Shareholders of Disney are paid a 1.64% dividend. The RBC price target for the stock is $135, which compares to the consensus target of $119.08. Shares closed most recently at $102.20 apiece.

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Home Depot

This company remains the undisputed leader in the home improvement retail category and another solid stock to own when rates go higher. Home Depot Inc. (NYSE: HD) is the world’s largest home improvement specialty retailer, with 2,270 retail stores in all 50 states, the District of Columbia, Puerto Rico, U.S. Virgin Islands, Guam, 10 Canadian provinces and Mexico.

Home Depot stores sell various building materials, home improvement products, and lawn and garden products, as well as provide installation, home maintenance and professional service programs to do-it-yourself (DIY), do-it-for-me (DIFM) and professional customers.

Home Depot shareholders are paid a 2.26% dividend. The $219 Merrill Lynch price target is higher than the posted consensus price objective of $211.13. The stock closed Friday’s trading at $186.85 a share.

SeaWorld Entertainment

While this company has changed the way it does shows due to a degree of public outcry, the parks remain a prime summer attraction. SeaWorld Entertainment Inc. (NASDAQ: SEAS) is a leading theme park company that delivers family-oriented entertainment through a diversified array of offerings and a focus on animal interaction and education.

The company owns and operates 11 theme parks in the United States, which attract more than 20 million visitors annually. Key brands include SeaWorld (with parks in Florida, California and Texas), Busch Gardens (Florida and Virginia) and Sesame Place (Pennsylvania). Flanker brands include Discovery Cove (Florida), Aquatica (Florida, California and Texas), Adventure Island (Florida) and Water Country USA (Virginia).

The analysts at Stifel have set a $20 price objective on the stock, while the consensus target price was last seen at $17. The shares closed at $17.82 on Friday.

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Six Flags Entertainment

This is another theme park giant that is poised to see a host of visitors this summer. Six Flags Entertainment Corp. (NYSE: SIX) is a regional theme park operator, with approximately 19 regional theme and water parks. Its parks occupy approximately 4,500 acres of land and are located in geographically diverse markets across North America. Its parks offer a selection of thrill rides, water attractions, themed areas, concerts and shows, restaurants, game venues and retail outlets. They offer approximately 830 rides, including over 135 roller coasters.

The Company’s parks include Six Flags America, Six Flags Discovery Kingdom, Six Flags Fiesta Texas, Six Flags Great Adventure & Safari/Six Flags Hurricane Harbor, Six Flags Great America, Six Flags St. Louis, Six Flags Magic Mountain/Six Flags Hurricane Harbor, Six Flags Mexico and Six Flags New England.

Six Flags investors are paid a solid 4.36% distribution. Wedbush has a $76 price target on the shares. The posted consensus target is $73.60, and the stock was last trading at $64.26 per share.

Of course, all these companies do business year round, but the summer brings warm weather and vacation time for families, and that means more business and more people spending money.