MENU

Can the Ardent Leisure Group share price bounce back from its 29% decline?

Unfortunately for its shareholders, year-to-date the Ardent Leisure Group (ASX: AAD) share price has fallen by approximately 29%.

The reason for the decline was a disastrous half-year result which saw the company post a $49 million loss, compared to a $22 million profit in the prior corresponding period.

The tragic incident at Dreamworld last year was, of course, to blame for the poor performance.

Not only did falling visitor numbers at its theme parks have a major impact on its result, but a $90 million write-down off the value of Dreamworld also played a role.

Can Ardent Leisure bounce back?

As bleak as it does look for shareholders, there is a glimmer of hope that a turnaround is not far off now.

Last week the company reported unaudited Theme Parks revenues of $4.4 million, down 35% on the prior corresponding period.

This may still be a significant drop, but it is a big improvement on the December and January’s numbers. During these two months the company saw revenue in the segment fall 63% and 50.4% respectively, compared to prior corresponding periods.

I’ve been impressed with this improvement and believe that theme park visitor numbers and revenues will continue to improve as the year goes on. Especially with Australia’s tourism boom in full swing.

As I wrote recently, inbound tourism rose 8.5% year-on-year in January. I think companies like Ardent Leisure, Village Roadshow Ltd (ASX: VRL), and Event Hospitality and Entertainment Ltd (ASX: EVT) are all in a strong position to profit from this trend.

Ardent Leisure’s U.S. operations.

There certainly is more to Ardent Leisure than its Dreamworld business. One key reason I think it is a great long-term buy and hold investment is its Main Event brand in the United States.

Management believes the highly profitable brand has the potential for upwards of 200 centres throughout the United States. Considering there are 31 centres operating today, if things go to plan this could be a significant driver of growth for at least the next decade.

With this in mind, I think Ardent Leisure can not only bounce back, but could provide strong returns for shareholders over the long-term. For this reason I would class it as a buy.

As well as Ardent Leisure I think these three growth shares are in the buy zone right now. Do you own them yet?

Top 3 ASX Blue Chips To Buy In 2017

For many, blue chip stocks means stability, profitability and regular dividends, often full franked..

But knowing which blue chips to buy, and when, can often be fraught with danger.

The Motley Fool's in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of "The Motley Fool's Top 3 Blue Chip Stocks for 2017."

Each one pays a fully franked dividend. Each one has not only grown its profits, but has also grown its dividend. One increased it by a whopping 33%, while another trades on a grossed up (fully franked) dividend yield of almost 7%.

If you're expecting to see the likes of Commonwealth Bank, Telstra and Wesfarmers shares on this list, you'll be sorely disappointed. Not only are their dividends growing at a snail's pace, their profits are under pressure too due to the increasing competitive environment.

The contrast to these "new breed" blue chips couldn't be greater... especially the very real prospect of significant share price gains, something that's looking less likely from the usual blue chip suspects.

The names of these Top 3 ASX Blue Chips are included in this specially prepared free report. But you will have to hurry. Depending on demand - and how quickly the share prices of these companies moves - we may be forced to remove this report.

Click here to claim your free report.

Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.