Our total allocation to Wonderla has been 7% which due to its underperformance compared to other positions, today stands fallen to 2.5%. We are reducing suggested allocation to the same to 4% (i.e. a drop of 3%). For model portfolio and for almost all our subscribers, this change wouldn’t require any adjustment/selling as the market weight is already under 4%. Only for those subscribers who joined in early 2020 or those who added capital recently and brought up allocation to Wonderla might have to partially sell (at a good profit) to bring weight down to 4%.

Does this mean we are no more bullish on Wonderla?
The short answer is NO. The long answer is that we remain positive on the business and management’s capability to scale this up however this is the worst hit portfolio business from COVID and would take longer to resume normalcy. The parks have reopened and stock price reflects the same (+100% from recent bottom), however from here on the road to reattain peak profitability could be slow and accordingly we do not suggest buying beyond 4% for incremental capital and hence adjusting the weight.