By Jennifer Hodson
DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--Six Flags Entertainment Corp. (SIX) shares have doubled since August, and management is betting the ride isn't over at the popular theme-park chain.
Chief Financial Officer John Duffey and Chief Operating Officer Alexander Weber Jr. were among four top executives who recently snapped up more than $2 million in stock. The company's general counsel and senior vice president of administration were also among the buyers.
The purchases mark another part of the Grand Prarie, Texas-based company's turnaround since emerging from bankruptcy on April 30. The executives scooped up the shares at between $59.75 and $60.46, and on Tuesday Six Flags was trading near $63.
"I love seeing buying into strength," said Jonathan Moreland, director of research for Insiderinsights.com. "It indicates the insiders feel that what made the stock rise in the recent past is likely to continue."
The executives and the company declined to comment.
Analysts have given much of the credit for Six Flags rebound to James Reid-Anderson, a former adviser to Apollo Management LP who became chief executive in December. Also joining Six Flags in September was Duffey, who had worked with Reid-Anderson as CFO at Dade Behring. Weber, a 40-year industry veteran and former CEO of Kings Leisure Partners, joined Six Flags in May.
Reid-Anderson is "pound for pound one of the best CEOs around," said Ian Zaffino of Oppenheimer & Co. Inc., who has the stock rated "outperform."
Six Flags, which celebrates its 50th anniversary this year, last month posted its first annual profit since 1998. The amusement park operator has also cleaned up its books by operating with less debt and more cash, while also unveiling a $60 million stock-repurchase plan.
Management has also decided to do away with its advertising campaign featuring the dancing "Mr. Six" character, opting to focus on regional advertising campaigns rather than national brand building. Aiding the new local push are what Reid-Anderson called in a recent conference call with investors, "the best lineup of new rides, shows and attractions in the past decade."
Six Flags plans to open at least 10 new attractions this year, including Green Lantern roller coasters in the New York and Los Angeles markets and the Texas Giant wooden coaster in Arlington, Texas.
Ian Corydon of B. Riley & Co. LLC, who has the stock rated as "Buy," said he thinks the executives clearly believe the stock, even after its spectacular rise, is undervalued.
"They melded people from both inside and outside the industry who formed a pretty pragmatic strategy," Corydon said. Key to that strategy has been cutting costs--moving the corporate headquarters, reducing head count and refinancing debt--and revamping discounts.