Stockchase Opinions

Jim Cramer - Mad Money Cinemark Holdings CNK-N COMMENT Nov 30, 2020

It'll be a foot race between this and the vaccine. If you think the vaccine is done in April, you have a winner here. CNK reports in May.
$15.450

Stock price when the opinion was issued

Consumer Products
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*LONG* (Pairs trade with a Short on Cineplex (CGX-T). Trading at two thirds of Cineplex’s valuation, a bigger company, more liquid with better organic growth.

PAST TOP PICK

(Top Pick Nov 4/15, Up 15.80%) The second largest cinema company in the US. 40% of their business comes from outside the US, mostly from Latin America where the average age is lower than the US. They make a lot of money in the concession area and that is where the margins are.

TOP PICK

*Long* A pairs trade with Cineplex (CGX-T). This is about twice the size of Cineplex in terms of their screens.

PAST TOP PICK

(A Top Pick May 4/16. Up 16%.) This is movie theatres in the US, as well as theatres in Latin America.

TOP PICK

* Long * Pairs Trade: *Long* CNK-N /*Short* CGX-T. Canadian long only managers always buy CGX-T as a recession proof business. It is a good company, but very expensive. It is twice the valuation of CNK-N. (Analysts’ target: $58.50). CNK-N is more focused on the cinema business. It has 3 times more screens. It is a bigger, more liquid name and has a better dividend yield. (Analysts’ target: $44.00).



TOP PICK

It could just as easily have been CGX-T. CNK-N has assets in South America as well as the US. It trades at a lower multiple than CGX-T. We will get a better slate of movies for 2018. They are going into the luxury theaters. In Brazil you can raise your prices even when attendance is flat. It has a 3.4% yield and he thinks that is decent. They have the ability to grow and raise the dividend. (Analysts’ target: $44.00).

PAST TOP PICK
(A Top Pick Sep 06/17, Up 18%) They are in the US with 30% of their revenue coming from Latin America. Their thesis was that the offering from Hollywood would improve in 2018. They offer the reclining chairs and adult beverages. He expects the fourth quarter to be tough. They are a good company and continues to hold it.
BUY
Film lovers will flock to cinemas when we get a vaccine. A long-term hold. This will soar when we get a vaccine.
BUY
options Shares are turning around today. They operate 522 cinemas. He's buying the 15 calls.