Jim Van Meerten's  Instablog

On Monday December 11 in my article Cedar Fair: Add some fun to your portfolio, I told you that there was unexplained price action in this stock and that such price action sometimes meant a favorable press release or acquisition announcement was pending. I advised buying around 9 with a protective stop loss at 8 in case something happened.

Below is today's press release. If you bought at 9 and your shares are acquired from you at 11.50 you have 2.50 per share profit. 2.50/9 = 22.78% profit. Not bad for a 10 day investment.

Merry Christmas - now pay off your credit card with these profits so you won't have to worry about how to pay for all those presents under the tree.

Press release:
Cedar Fair LP, the owner of Kings Island theme park in Mason, will be acquired by Apollo Global Management under a definitive merger agreement announced Wednesday.
Apollo, a private equity firm, will pay $11.50 in cash for each limited partnership unit, for a total of about $2.4 billion, according to a news release. Shares of Cedar Fair (NYSE: FUN) opened at $9.08 Thursday.
The deal is subject to approval by unit-holders, as well as regulatory approvals and other conditions. Pending those approvals, the deal will close by the beginning of second-quarter 2010, Cedar Fair said.
The company can also solicit other proposals from third parties for 40 days, under the terms of the agreement.
At the deal’s completion, Cedar Fair will become a private company, owned by an Apollo affiliate.
“We have considered a wide range of strategic alternatives over the past several years,” said Dick Kinzel, chairman, president and CEO of Cedar Fair, in the release. “After considering these strategic alternatives, we have concluded that the transaction with Apollo is in the best interest of our unit-holders.”
Apollo Global Management, with offices in New York, Los Angeles, London, Singapore, Frankfurt and Mumbai, has more than $51 billion in assets under management.
Cedar Fair posted third-quarter net income of $107.6 million, or $1.92 per share, compared to $91.5 million, or $1.65 per share in the year-ago quarter. Total net revenues fell to $519.9 million from $540.3 million. The company said in November that it would suspend its dividend beginning in 2010 to pay down short-term debt.
Cedar Fair (NYSE: FUN), headquartered in Sandusky, is a publicly traded partnership that owns and operates 11 amusement parks, six outdoor waterparks, one indoor waterpark and five hotels in eight states and Ontario. The company acquired Kings Island in June 2006, as part of its $1.24 billion purchase of Paramount Parks.

Jim Van Meerten is an investor who writes on financial matters here and on Financial Tides. Please leave a comment below or email FinancialTides@gmail.com

Disclosure: I hold no positions in this stock at time of publication

Disclosure: no positions

Lately I'm having a very hard time trying to figure out who is prioritizing the Administration's missions and goals. The President told the bankers that they had a duty to fund mortgages and make small business loans to simulate the economy. He holds press conferences to urge everyone to fund public health care and start spending. Every time he holds a press conference it is either about spending money the government doesn't have or taking away the incentive to produce goods and services by taxing to death the people he is counting on to kick start the economy.

Someone needs to tell him that most of the behavior he is demanding is the very behavior that got us into this mess. What happened is evident. It's not really rocket surgery!

I can tell the President how to fix the economy. First make mandatory reading of every one in his administration Dr. Stanley's book "The Millionaire Next Door". Dr Stanley, a GSU professor has made a life's work studying how people get rich. Most had a very simple plan: 1 -- spend less money than you make and invest the difference and 2 -- don't have any consumer debt, only borrow to invest in productive assets.

Second is to ask bankers to make consumer loans for mortgages only to people that can pay them back. Any one who can put 20% down , buy a home that is no more than 3 times their income and with that loan has a debt service of less than 30% of their take home pay deserves a mortgage -- the rest don't.

Third, make loans to small businesses that need to buy productive assets to fill orders they have in hand but do not have the present capacity to fill. The other night when flipping channels I hit a reality show who's name I can't remember. People with small business ideas pitched investing in their company to venture capitalists. Most came in with a product, market research, focus group results and a well prepared pitch book. One of these guys always asked the same question: " Besides all your research, how may orders do you have?" He turned down every pitch that didn't have orders in hand. What a novel idea? Sales of products not pitching of ideas. Isn't that what bankers are supposed to look for?

We need to get back to both governmental and personal fiscal responsibility. The President has to understand that it is not the duty of the CEOs of the banks to fund the needs of society. The duty of the banking CEOs is a fiduciary responsibility to their stockholders to gather assets and use those assets to make profitable loans and investments. Their duty is to maximize profits for the shareholders.

The business of America is business and the goal of a business is to make a profit. Any idea that will make a profit should be funded; the rest need to become case studies on how not to run a business.

Jim Van Meerten is an investor who writes on financial matters here and on Financial Tides. Please leave a comment below or email FinancialTides@gmail.com

Disclosure: no stocks mentioned

I still have some room in my VMSLO fund and after screening on BarChart for stocks hitting new highs that trade below 100K per day came up with Energy Income & Growth Fund -- FEN. Not all my plays are for price appreciation only. Sometimes you need to look at total return. This stock has doubled in price this year and still pays a 7.50% dividend. Energy is where it's at.

The fund is a closed-end fund which invests in Master Limited Partnerships of energy related companies. Some of what you are paying for is expertise in this area.

On a technical side BarChart show this stock has had price appreciation in 15 of the last 20 trading sessions and is 5 for 5 recently. It has had a 17.25% price appreciation in the last 65 days and almost doubled in price this year. There are buy signals on 13 of BarChart's 13 technical indicators for a 100% buy rating.

Over on Motley Fool CAPS members think the fund will beat the S&P 500 by a vote of 48 to 8 with the All Stars in agreement 13 to 1.

Recommendation: I'm adding Energy Income & Growth -- FEN to my Marketocracy portfolio VMSLO around 23.80 with a stop loss no lower than 22.

Jim Van Meerten is an investor who writes on financial matters here and on Financial Tides. Please leave a comment below or email FinancialTides@gmail.com



Disclosure: Dsiclosure: No positions at the time of publication