If you’re pretty active in the markets, your email inbox is probably filled with headlines like…
What’s the better buy? Amazon (AMZN) or Apple (AAPL)? Nike (NKE) or Lululemon (LULU)? Should you be a growth investor or a value investor?
In other words, you probably get a bunch of “either/or” propositions that are more about marketing than investing.
But the markets are not about “either/or” strategies. Instead, you should be looking to buy companies that are fantastic businesses that are trading at bargain prices according to earnings, cash flow or asset values.
Or you want to buy companies that are exhibiting strong, smooth momentum that’s indicative of strong institutional buying pressure that’s going to push a stock a lot higher.
Remember… You want to have some value and some momentum in your portfolio. So, if one stock falls into the value category and the other falls into the momentum category, buy them both. If neither qualify, don’t buy either one. It’s not an either/or world!
So, rather than focusing on this stock versus that stock, you should be focused on value and momentum first. Then, you need to get quantitative about it to get the storytelling, emotion and bias out of your decision-making.
SeaWorld Entertainment, Inc.
Now, speaking of momentum, there’s a great stock that I like a lot and want to tell you about today.
That stock is SeaWorld Entertainment, Inc. (SEAS). When I lived in Orlando, I loved going to SeaWorld to walk around and see all of the animals. I know it’s controversial, but I think the company does far more good for marine wildlife than they do bad.
And apparently many folks seem to love the company despite the controversy because SeaWorld is seeing a resurgence. As the world opens up again, SeaWorld is attracting folks that are tired of being stuck at home.
The company has three SeaWorld locations, three Busch Gardens parks and six water parks around the United States. And things are going fantastic for this company.
Why the Institutions are Interested
Visitor numbers are almost back to 2019 levels, and they have surpassed 2019 numbers in terms of total revenue because people have been sitting at home and stacking cash for a long time. The company is enjoying record cash flows and is on pace for record profits as well.
All of its parks are currently open, they’re introducing some new rides and there are a lot of great things going on at SeaWorld right now.
So it makes sense that for the last four quarters, the company has blown away analyst expectations with earnings coming in well above estimates. This has analysts scrambling to raise their estimates, and when those two things come together, they attract a lot of institutional attention.
There’s a lot of institutional money out there, and they’re looking for companies that are beating earnings and guiding their forecasts higher.
That’s exactly what’s going on at SeaWorld right now, and it’s why we’re seeing that smooth, up-and-to-the-right price momentum that we really like.
It looks like we’ve got a trend going in SeaWorld that’s going to continue to stay in place. People are tired of staying at home, they’re going to theme parks and SeaWorld is going to attract a lot of that business.
Subscribe today and receive daily advice right in your inbox, guiding you to a better way to wealth.