Cineplex Inc (CGX.TO)

You want to own when the markets are bad because it is recession proof. But they are tied to the movie crop. Their recent quarter had a raised dividend, attendance was up, but profit was down. They blame the movie slate and bad weather. Buy it and park it for 4-6 years.

Well managed company. Business is fairly cyclica, there is the economy as well as the rate of successful movies. It’s the concessions and advertising that make money, but they have to get people in the seats. He would like it to go down further to be attractive for him.

Makes its money drawing you into the theatre for a low margin movie and then selling popcorn with infinite margin. They are dependent on Hollywood. It has not been a good season. Wait for the stock to get a little more reasonable in price, or for a bunch of blockbusters to come along.

He sold too early. A great company. It pulled back nicely. It has basically a monopoly. It has a great franchise and great business model. Probably now is a good time to look at it since it bounced off its 200 day moving average.

Chart shows a long upward trend line from early 2012. Currently it is testing the trend line. As long as this holds, you are okay. The old high of about $40 in mid-2013 is now its support.

A great company. They have found lots of ways to raise their earnings and their margins. One of the most important things in a company like this is, what does the calendar look like for new releases. There is about 18 months of very significant releases coming for the movie industry. Doing a very good job of raising their revenue per visitor.

Started buying again for new accounts when it pulled back. They are good at maximizing revenue per patron. People are still going to movies despite DVDs and streaming and Netflix. They just acquired a chain of theatres in the Eastern provinces.

(Top Pick Feb 14/13, 27.15%) Benefits from a good calendar of releases. What is going to drive this is what is coming. Some great movies coming over the next year. Pulled back a little but continues to look attractive.

The only problem with this company is their ability to drive growth and rationalize the multiple it trades at. An excellent source of income for a lot of portfolios. The recent drop is more of a temporal operational miss and an opportunity to pick up a stellar premium income generating company at a better price. Normally this trades well above 20X earnings.

A number of theatre companies in the US found weather did not help them. Thinks theatre companies will do well going forward.

78% market share. Benefitting from 3D films. Concession is 30% of revenue. They are running out of room to grow. They took over digital advertising boards in fast food restaurants, but he would look for growth elsewhere as they are not significant enough.

A wonderful company. Doesn’t think 2014 is going to be the best year for movies, but the 2015-2016 slate looks incredible. They are doing all the right things. It’s all about concessions, where they make huge margins. Should benefit in 2014 from its recent purchase of Empire Theatres. Yield of 3.55%.

Had always thought the stock was expensive, but it just kept on going. Has become a virtual monopoly in most major markets in Canada. A lot of their content is out of their control as to how good a season Hollywood gives them. Stock got a bit ahead of itself and is now due for a correction. Very well run. Could be a very good investment.

(A Top Pick Feb 19/13. Up 24.66%.) Still likes this. The upcoming movie slate for this summer has some duds but has some good ones as well. This is really about the social aspect of movies. The company keeps increasing their average revenue per patron. Also, increasing their digital advertising as well. The company has about a 74% market share in Canada, basically a monopoly that nobody knows about.

Surprises and surprises. He made the mistake of selling it. Take a partial position now. You want to see a lot of volume through the theaters because it is the food, not the tickets.