It hasn't been a great day for shareholders of Ardent Leisure Group (ASX: AAD). At one stage its share price tumbled almost 6% lower to $2.20 despite there being no news out of the leisure and entertainment company.
Today's decline is likely to be attributable to reports in the News Limited media, which revealed that Ardent Leisure's embattled Dreamworld theme park resembles a "ghost town".
According to the report Dreamworld has struggled to recapture crowds since October's tragic incident despite lowering ticket prices, extending operating hours, and offering free meals for children.
Its loss appears to be the gain of rival Village Roadshow Ltd (ASX: VRL). The report states that its Movie World and Sea World attractions have been extremely popular over the Christmas and New Year holidays.
Is today's sell-off justified?
Well firstly it is worth noting that there are reports elsewhere which contradict the ghost town view and show Dreamworld to be actually quite busy.
Secondly, there certainly is more to Ardent Leisure than just its Dreamworld theme park. As well as its other theme parks and entertainment centres in Australia, there is the exciting Main Event brand in the United States.
I see its Main Event family entertainment centres as the driver of long-term growth for Ardent Leisure and a key reason to invest.
The funds from recent sales of its health clubs division and marina portfolio are expected to be used to accelerate its growth. At present there are 27 Main Event centres in operation and four under construction, with management targeting a total of 200 centres throughout the United States.
As those 27 centres contributed US$174 million to total company revenue in FY 2016, it is clear just how big an opportunity the company has with the Main Event brand.
Time will tell if management can reach its targets, but the early progress it has made has been very encouraging in my opinion. I would suggest investors consider buying Ardent Leisure on its share price weakness.
