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Is the Ardent Leisure Group share price in the bargain bin?

Since the start of the year the Ardent Leisure Group (ASX: AAD) share price has thoroughly underperformed the market, losing approximately 12% of its value.

But with signs of improvement being seen at its theme parks once again, I think now could be the time to invest in the beaten down entertainment company.

Why should you invest?

Although I feel its shares may be reasonably volatile in the short-term, I remain confident that in the long-term they will head significantly higher.

There are a couple of catalysts for this. The first being a successful turnaround of its theme parks business.

Pleasingly, on Monday there were signs that its turnaround plan is working. In June Ardent Leisure saw a 30.5% drop in theme park visitors and a 35.3% fall in unaudited revenues versus the prior corresponding period.

This was a big improvement on the last three months and was achieved despite the impact of Victorian school holidays being pushed back to the start of July compared to June 25 last year.

The second catalyst is its Main Event centres in the United States. These lucrative family entertainment centres are the main reason to invest in the company in my opinion.

Although the centre’s footprint has grown strongly over the last few years and the company is on track to finish the year with 38 centres across 16 U.S. states, it still has a significant runway for growth ahead.

After all, management recently reiterated that it is committed to its plan of increasing its network to 200 centres.

If the company delivers on its promise then I believe its earnings could grow at an above-average rate for at least the next decade.

Foolish takeaway

All in all, I believe this could make Ardent Leisure a good option for patient buy and hold investors that can cope with a little short-term volatility. As a result, I continue to believe it is a superior investment to rival Village Roadshow Ltd (ASX: VRL).

Finally, unfortunately this year Ardent Leisure has had to cut its dividend. While I expect it will be increased to prior levels again in the next couple of years, in the meantime I would suggest investors in search of income consider this high-yielding dividend share.

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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.

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