Cineplex Inc (CGX.TO)

Used to own, took profits. Looking at it again. Not your ordinary movie house, they’re becoming an entertainment centre, which is a trend. But a tricky business. Likes management. Down 22% and yield is 6%, which is the kind of stock he likes.

They have great market share in Canada, but people don’t want to go to movies any more. He views it as a hold for income and does not see the recent down turn as being that negative. They have the capacity to do some more acquisitions to go into the full entertainment space in the US – especially play spaces for adults. He sees this as a weak buy right now.

An intersting, well-managed company, but lacks blockbuster movies in the past year. Hand it to them for the Rec Room, though, for creating an entertainment centre. Short term, Cineplex depends on blockbusters. Be cautious here.

She has owned this for years. The long pullback has created a buying opportunity. There have been some good films, so box office receipts should improve. In addition, the company is diversifying the ways it delivers entertainment, with more interactive activities that are fun for families, and is increasing the dollars per customer visit. This will not be a very growth-oriented company until the diversification’s value kicks in. There is risk because the company is drawing on its credit to fund its diversification.

The narrative is that nobody is going to the movies anymore and are watching Netflix instead. Cineplex is still making a lot of money, but in five years will people still go to the movies? So, Cineplex is repositioning itself and investing in other areas like the Rec Room. It's smart that they're taking their box office revenues to build other areas. They can't build more cinemas. They have a reasonable valuation and they won't cut their dividend.

He recently introduced it to his equity income portfolios. It did a deep dive and was yielding 6%. We have had a good run in movies. Q2 this year will be way ahead of Q2 last year. He likes the 'scene' program. It is a wonderful asset. It is a cheap stock and the dividend is safe. You could get a bounce.

He holds this. They're diversifying into the Rec Room and golfing. The stock is basing now. The dividend is safe and generous at 5.8%. Maybe put a stop loss based on your risk tolerance, maybe using the old lows. Yes, it's been a slight disappointment, but there are better movies this year that'll help their box office.

(Past Top Pick, January 23, 2017, Down 37%) He sold his shares. We've gone through a strong movie season, but the stock hasn't moved much. He doubts the movie slate will be as good in the second half of 2018. This will be flat for some time to come.

(A Top Pick May 17, 2017. Down 39%). This has been a disaster for him. The market has decided that people will never go to movies again, which is wrong. The number of people going to movies has gone down a little bit but box office revenue has been steady. Cineplex has additional revenue streams. They have rec rooms, like David & Busters in the United States, which is up significantly. In addition, Air Canada flights show movies from Cineplex, people watch Cineplex news feeds. Cineplex also gets more value add from its theatres by selling VIP seats where you can order a glass of wine and a sandwich. Cineplex is also hosting video game tournaments in its theatres, packing people in to play or watch. This can take the average ticket from $15 to $50. He thinks the investment public has gotten Cineplex wrong and thinks the stock will rise back to $40 or $45. He is still buying it.

He sold it too early. Pays a 6% dividend at 23x earnings. They diversified their businesses which are maturing and paying off now. But he worries about audiences changing their viewing habits, meaning watching from home or downloading for free, especially by young people. He'd rather buy this at 15x earnings. Also, not every year do you get blockbuster movies.

It had quite a setback including its earnings. They are getting to a level which is maybe cheap enough. He wants to let some more time go under the market's feet before getting back in again. Rushing in may not be a good idea.

The dividend in unsafe. They did a great job growing concessions over the years with their VIP program, but this has stalled. New ventures like Top Golf and the Rec Room are new avenues of revenue. The dividend is nearly 6% and CGX is paying nearly 100% earnings. They face secular headwinds. The stock price is washed-out.

He held it for years and sold it at $53, because it was getting expensive. Also, there was nothing left to do in the Canadian cinema industry after acquiring Famous Players, etc. They have a smart CEO. The Recroom and their new golfing game are good moves. But these new operations need time to raise the share price. By 2020, they want cinemas to occupy only 60% of their operations. It's still trades at a higher multiple than American counterparts.

He is taking a look at it. He has never owned it. Cinemas were said to be dying. The whole industry has changed and they are thriving. The business model seems to be here to stay. He would take a look at it. 5.7% yield.

Great management team. Netflix (NFLX-O) and at-home entertainment has been killing them. A stock that you look at and you want to buy it. He is just not there yet. They are having new initiatives like the rec rooms. This summer is going to be the tell because there is a very strong slate of movies.