With most theme parks like Disney and Universal closed across the country, I was wondering what families would do with the kids this summer. I thought about the drive in movies our parents used to take us to when we are kids where we all stayed in the car- but they are just about all gone these days.
But it got me thinking, being in the car was one way of keeping the family safer from Covid-19. Certainly safer than wondering around Disney or Six flags or Universal I would think.
Then I remembered, our parents took us to this safari park - I cannot even remember what it was called. But basically we were in the car most of the time, except when we got out to feed some animals.
I figured, that might work as an investment with people being concerned about Covid19 - I wondered if there were any around and if so, were they listed.
Parks! America, Inc. (OTCPink: PRKA)
Turned out there was. A small company with a market cap of $12 million that owns two safari parks and is negotiating to buy a third.
From the comfort of your own vehicle, you can travel through our 3.5-mile drive experiencing hundreds of animals. Get up close and personal like no other animal adventure. Many animals will come right up to your vehicle for a greeting. Come face-to-face with a camel, a watusi, a zebra or hand feed an American bison. You'll see elk, water buffalo, giraffes and more running free. We have 75 species of animals and over 550 of them on 500 acres! Families often say how big of a blast they have, how much they ooh-and-aah, and just break out in laughter.
It generates a net profit of about $1 million a year. It has a Enterprise Value/Free Cash Flow ratio of 7.3, so it seems to be throwing off some nice cash.
The business is seasonal - so best to look at the full year figures rather then the latest quarter:
So I dug into the latest 10Q and 10k and found that the Georgia park is quite profitable, but the Missouri not so much. They say they are working to improve the profitability of the Missouri operation, but does not look like they have made a lot of progress. Plus the just closed on the purchase of Aggieland Safari in Texas.
Management seems to have a reasonable stake in the company. Have not worked out quite what has gone on, but it looks like they sold a chunk of shares to an investment fund in January, and then bought some more when the price dropped in March. Not sure if they bought them off the investment fund or somebody else.
People are going to play it safe with their family as we get over Corona Virus. So I bought some of these shares as they seem to have nice cash flows and an interesting twist.
Not Investment Advice
As always, this is not investment advice. You should do your own research. You should consult your professional advisors.