Peter F. Way, CFA's  Instablog

Peter F. Way, CFA
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Peter Way Associates provides investment professionals and individual investors with forward-looking, market-derived Risk:Reward tradeoff assessments for widely held and actively traded common stocks and Exchange Traded Funds (ETFs). The firm maintains daily the odds of higher and lower next 3... More
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  • Make Money While Having Fun At CEDAR FAIR (FUN) 0 comments
    Jun 27, 2012 7:31 PM | about stocks: FUN

    A favorite reacreational spot of legendary Fidelity portfolio manager, Peter Lynch, is Cedar Fair (NYSE:FUN). It happened to show up at the top of our daily list of odds-on, big annual-rate-of-return stocks today.

    In the spirit of the vacation season, here are the forecast particulars on this big Lake Erie entertainment park:

    Out of the last almost two years of daily evaluations, the pro market-makers have implied the current (+16% upside price change potential vs. -1/2% drawdown exposure) prospect 18 times before, or less than 4% of the time.

    The actual subsequent price experience by the stock in all these instances was an average gain of +22% and an average drawdown of -3% during the 3 months following each forecast.

    Using the top of the forecast range as a sell target provided average gains of 13.7%, with 17 out of the 18 experiences profitable, a win ratio of 94%.

    The average holding period for all 18 commitments was 17 days, which compounds to an annual rate of +600%. Such is the return leverage of Time-Efficient Investing.

    Peter Lynch may still know how to have FUN!

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Stocks: FUN
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