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Why Six Flags Entertainment Stock Lost 11% in March

By Demitri Kalogeropoulos – Apr 4, 2019 at 4:09AM

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Investors processed news that the theme park specialist's CEO is planning to retire.

What happened

Six Flags (SIX 0.29%) 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.

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

Young adults on a roller coaster.

Image source: Getty Images.

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.

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.

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