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Six Flags CEO bought $3 million worth of company's shares to prove theme park giant's value

Key Points
  • "Mad Money" host Jim Cramer spoke to Six Flags CEO Jim Reid-Anderson about the theme park giant's prospects.
  • Reid-Anderson, formerly the company's executive chairman, said he bought $3 million worth of Six Flags' stock on Friday.
  • The CEO also flagged the company's opportunity and defended its latest earnings report.
How Six Flags CEO Jim Reid-Anderson proved theme park giant's value

Six Flags' stock may have gotten hit after a weaker-than-expected earnings report in July, but CEO Jim Reid-Anderson told CNBC that he has since only reaffirmed his faith in the company.

"Last Friday, I spent $3 million buying the company's shares because I believe that the stock price, where it is today, doesn't reflect the true value of this company," Reid-Anderson told "Mad Money" host Jim Cramer on Monday. "A 5.1 percent yield, Jim. That's the highest yield in the industry. And so right now, it's an opportunity."

While the CEO acknowledged that management was disappointed with the earnings miss, he maintained that revenue and profitability reached record highs in the second quarter.

He also said that in six of the last seven years, Six Flags shares declined during the third-quarter period, making this quarter the prime time to buy the stock.

"In fact, a year ago, we were pretty much at our 52-week low, he said. "So there's a trend that tends to develop and this is the perfect time to buy."

Reid-Anderson took the role of CEO on July 18 after the sudden retirement of former Six Flags CEO John Duffey. Reid-Anderson formerly served as the company's chariman, president and CEO until February 2016, when Duffey took over as CEO and Reid-Anderson became executive chairman.

Reid-Anderson told Cramer he looked at his return as "a huge positive," listing the many growth drivers the theme park giant could benefit from in the coming years.

"There are many reasons why this is a good company, and the most important is, long term, we see huge opportunities," he said. "This is a great industry. In fact, it's a recurring revenue industry. And it's very stable, even in a downturn. We're the best brand. We're the most famous brand. If you think about regional theme parks, there's no better brand. And it's truly a global brand."

And given the fact that putting up a theme park, if the project receives government approval, can cost anywhere between $500 million and $700 million, Reid-Anderson said Six Flags has solidified its place in the industry.

"You don't have any record [starting from scratch], and we've got 56 years in this industry of proving that we can do this and we have 20 parks," the CEO said.

Six Flags' recently opened park in Mexico adds to the company's budding international portfolio, which already includes locations in Canada, China and the United Arab Emirates.

Reid-Anderson said that the Mexico location, which almost instantly boosted season pass sales by 40 percent, is only the beginning of Six Flags' upward trajectory.

"First of all, we have so much opportunity in season passes. Less than a third of our guests, unique guests, own a season pass. We're only halfway through maybe the fourth innings on our pricing opportunity. We've got this thing called the all-season dining pass, which is a tremendous growth opportunity," the CEO told Cramer. "We've got international. And then on top of that, these water parks. You add all of that up, it's opportunity just staring you right in the face with a 5.1 percent yield. How do you beat that?"

Watch Jim Reid-Anderson's full interview:

Six Flags CEO bought $3 million worth of company's shares to prove theme park giant's value

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