Kiddie arcades can score well with adults too -- especially the investing types. Chuck E. Cheese parent CEC Entertainment
This is a company with play areas and indoor token-swallowing games. Remember Discovery Zone? Remember that cool mom-and-pop place a few blocks out where all the kids would have their birthday parties? Yes, they're all gone now. CEC is not only surviving but thriving in what had been a traditionally fickle niche.
Then you look at the menu and you see that it's, well, pizza. Did you notice how the Domino's
In Chuck E. Cheese terms, faring well in this environment is a lot like landing a perfect score in Skee-ball. Yes, CEC is rocking right now as it's laughing all the way to bank with its pockets full of tokens.
The company is now looking to earn between $2.13 and $2.17 a share this year. Back in April the company was capping its profit potential at the $2.12 mark. So why is the company improving at a time when the purveyors of carbohydrates such as Krispy Kreme
The answer is probably as simple as the grin on that knee-high kid in front of you. Odds are that you haven't seen too many Atkins-friendly kid menus out there. But it's not even as though pizza pies are the major driver of the chain's foot traffic. Cheaper, nearer, and more waterproof than the nearest Six Flags
Selling at nearly 15 times this year's raised earnings projections, the stock is a reasonably priced play. The company knows it, too, as it has been busy buying back shares this year. Investors, even those who aren't kids at heart, can do much worse than following suit.
How close is your nearest Chuck E. Cheese? Is it a recommended outing for young children or just a way for parents to relieve some neglected guilt? All this and more -- in the Parents and Expecting Parents discussion board. Only on Fool.com.
Rick goes to his local Chuck E. Cheese -- with his kids. Really. It's for them. OK, so maybe he plays a game or two -- or more. Why not, right? He owns shares in Krispy Kreme but not in any of the other companies mentioned in this story.