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SeaWorld Cares: It's 'For Real' This Time As It Ends The Orca Shows

SeaWorld gave its investor day presentation this week.

SEAS is ending the theatrical orca whale show in San Diego.

Besides this headline story, there were many positives and negatives in the presentation.

The stock shouldn't be bought until we see the initiatives working.

Usually I like to get out ahead of initiatives, but some of these changes won't happen until 2017.

I decided to wait until SeaWorld (NYSE:SEAS) held its investor day to comment on the stock as this presentation was more important than the earnings report. Q3's attendance was down .4%, which was disappointing because it shows the firm didn't bounce back after last year's down season. Management can try to spin this by calling it stabilization, but I thought it was going to do better when I originally recommended it in January.

When I sold it last month, it was because I finally saw the writing on the wall from Q2 which showed little improvement from last year. The stock's performance hasn't been terrible because this underperformance has mostly been priced in. You could have made money in the stock depending on the timing of your purchases. I was preparing to sell it at $20, but the decision of the California Coastal Commission to ban orca breeding in the San Diego Park caused me to sell at $18.30. This was poor timing as the stock went to $20 shortly afterwards.

While the decision to sell SeaWorld right after the decision by the California Coastal Commission's decision was poor short-term timing, I stand by my change in perspective in terms of the long-term health of the business. This long-term business health was discussed at the investor day on Monday. I am going to review my opinion on this investor day presentation, which was the new CEO Joel Manby's first presentation showing how he would turn the company around. The presentation was a mixed bag that had a couple of inconsistencies. Overall, I am maintaining my opinion that this is a stock to avoid until further notice.

The biggest change Joel Manby is making is to focus on SeaWorld's animal rescue program, which reached 27,000 animals saved recently. The company is also diversifying away from using only orca whales to drive attendance. The concept of focusing on animal rescue may seem similar to what it was already doing, but I have noticed a difference. The firm has pivoted away from directly combating customers over the facts about SeaWorld's orca program; it instead has moved toward an approach of listening to the customers' needs by showing off the good work it does.

This is counter to what I thought would be successful as I was in favor of attacking the misinformation head on. However I, along with the previous management team, was wrong about this strategy as the 2015 results were poor. Having these numbers at hand must have shown Joel that this new strategy was the right one to pursue.

SeaWorld is both diversifying away from orcas and showing off its animal rescue program by replacing employee name tags with the animal it is focused on saving. The firm is also going to start spreading awareness about an endangered animal at all of its parks with a new animal being discussed each quarter.

The most obvious change toward diversifying away from relying on orcas was the phase out of the theatrical orca whale show at the San Diego parks. This is part of the firm's new initiative of listening to customers. It may not have been the most preferable move, but...


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