SeaWorld: Benefits of Being The Remora

Christopher Pavese presented his in-depth investment thesis on SeaWorld (SEAS) at Wide-Moat Investing Summit 2015.

SeaWorld is in a difficult position today. Disney and Universal are at the top of their game at the same time the company is facing a barrage of negative publicity. But we have seen this movie before. The company faced very similar challenges in 2010 and despite elevated competition, attendance and revenues rebounded strongly from trough levels until recently. Today, the market is valuing the company at a trough multiple on trough earnings. Chris Pavese thinks that’s a mistake. He sees plenty of downside protection at the current price, which is approaching levels where it was last taken private. The replacement cost on these assets is estimated at $5 billion. Chris Pavese estimates fair value closer to 50% higher than the current price and 2x over time. And shareholders are getting paid over 4% to wait in the interim.

About the instructor:

Prior to joining the Broyhill family offices, Christopher Pavese worked as a Vice President and Portfolio Manager for The JPMorgan Private Bank, where he managed over $1 billion in discretionary assets for high net worth individuals, trusts, endowments and foundations. Christopher served as an active member of the JPMorgan Private Bank Investment Team as well as the firm’s Trust & Investment Committee, where he assisted in the construction of the Private Bank’s model portfolios and monitored the bank’s fiduciary relationships. Christopher is a CFA Charterholder and serves as President of the Board for the CFA Institute’s North Carolina Society. Christopher earned a BS in Finance from The Pennsylvania State University.

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