Parks! America, Inc.(OTCMKTS:PRKA) continues to rise on significant lower volume but highly positive investors sentiment in recent trading. The stock looks as if it’s about to either make a run up to previous highs or plummet lower after it has been consolidating over the last few days. Volume has been declining but price remains strong. Investors would welcome as confirmation of another huge leg up. The stock has moved from $0.04 at the end of last year to a high of $0.15.
PRKA is a profitable company with revenues. PRKA is in the business of acquiring, developing and operating local and regional theme parks and attractions throughout the USA. It owns and operates several subsidiaries. The Company focuses on building a family of theme parks through acquisitions of small, local and regional, privately owned existing parks and the development of compatible, themed attractions. The Georgia Park is home to over 600 animals, birds and reptiles, consisting of over 60 species. The Missouri Park offers a gift shop, a food and beverage area, and a petting zoo. PRKA has a reptile house within the traditional zoo-like area of its Missouri Park, featuring reptiles from various continents. The Company has approximately five amusement park kiddie rides at its Missouri Park.
Revenues at PRKA has been growing steadily over the last 5 years. Online resources show that since 2012, revenue has grown from $3.69M to $4.38M in 2015…a 4.38% CAGR. Operating Income has grown from $0.54M to $0.89M, a 13.3% CAGR. If PRKA can continue growing its topline the bottom line should grow aggressively as PRKA is a highly leveraged company. Majority of the costs are relatively fixed. In the most recent quarter earnings, PRKA reported a 19.6% growth in their revenues and increase of 22%. According to our sources, Park attendance has had double digit growth in the past six of seven quarters. The increase in revenue was due to increase park attendance and higher average revenue per guest.
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The CEO stated “We are pleased with the continuing exceptional growth in attendance based net sales, especially during one of our off-season quarters. Both of our Parks performed well and continue to deliver an outstanding wild animal safari experience to our guests.”
One of PRKA highest priorities is to continue to improve the operating profit at Missouri Park. Since the acquisition of our Missouri Park in March 2008 it completed the installation of five amusement park “kiddie” rides at Missouri Park that are targeted toward families with children between the ages of three and twelve years old. The addition of these rides is a continuation of our ongoing effort to improve the overall guest experience at, as well as public perception of Missouri Park. The company expects that over the course of several years these efforts will ultimately yield favorable results.
Below are customer reviews of the parks from Google and Yelp. Nothing to significantly call out either good or bad that would impact the stock.
PRKA took out some significant debt in refinancing loan of $3.572M. There is approximately an addition $600k of payables. The company has been able to grow its book value since 2012 from $2.78M to $3.6M. Cash on hand is only at $560k
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Currently trading at a $7.26 million market valuation PRKA has mainly fixed assets of close to $7 million and over $4M in payables. The company has very little cash on hand and has a high debt to equity ratio. PRKA could definitely be ready for growth if it can continue to drive park attendance and increase average revenue per guest. It remains to be seen if this has the excitement factor to drive up the stock price.
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Disclosure: we hold no position in PRKA either long or short and we have not been compensated for this article.