Ardent Leisure share price ‘materially undervalued’: expert

The Ardent Leisure Team Ltd (ASX: ALG) share price is up by nearly 2% in early afternoon buying and selling to 53.5 cents.

Shares in the concept park operator have fallen by additional than 60% in value this month adhering to a funds return to shareholders.

Ardent Leisure owns and operates a bunch of amusement and leisure corporations together with the concept parks Dreamworld and WhiteWater Environment, as nicely as SkyPoint, on the Gold Coast in Queensland.

One particular pro thinks the Ardent Leisure share value is now way below what it need to be.

Increasing community notion of Ardent Leisure

WAM Funds Minimal (ASX: WAM) is a detailed expenditure enterprise run by Wilson Asset Management. Its mandate: To make investments in the “most compelling undervalued advancement prospects in the Australian market”.

The business introduced its June 2022 trader update yesterday. In it, the fund manager explained that Ardent Leisure was a beneficial contributor to the fund’s overall performance in June.

In the update, Wilson reported:

With Ardent Leisure Group’s topic parks currently being materially impacted during the coronavirus pandemic, we believe the small business is in a powerful situation to capitalise on a recovering domestic and intercontinental tourism sector.

The company’s operating price tag foundation has been structurally reduced, with reinvestment in the rides and attractions, and bettering community perception, which we count on to underpin a potent restoration in its profitability in FY2023.

A tragic incident at Dreamworld in 2016 seriously destroyed the public notion of Ardent Leisure.

4 men and women ended up killed and many others wounded when a floating system overturned on the Thunder River Rapids Trip. A two-yr inquest was concluded in 2020. The ride is now shut.

Share selling price ‘materially undervalues’ Ardent Leisure

Wilson said the Ardent Leisure share price is very low in contrast to its world-wide friends.

Wilson said:

We believe Ardent Leisure Group’s present-day share price tag materially undervalues the company relative to global peers, although opportunity exists to unlock further worth by using advancement of excess land belongings.

Ardent Leisure share price tag snapshot

Ardent Leisure shares plummeted immediately after the inquest’s findings were being handed down in February 2020.

They arrived at a trough in March 2020 and have progressively recovered considering the fact that to be up 605% at the start out of this month.

The Ardent Leisure share value then strike the skids yet again but for very distinctive causes. It’s down far more than 60% from $1.41 at the marketplace shut on 1 July to 53.5 cents now.

The follows a shareholder vote in favour of marketing the most important event enterprise in the United States to Dave & Buster’s Leisure, Inc. This meant a return of cash for shareholders totalling $455.7 million.

This was paid on Wednesday in the sort of an unfranked special dividend of 95 cents per share.