Keith Richards IMAX Corp. IMAX-N COMMENT Sep 26, 2018

Technically this is up to a little bit of resistance right now, but that doesn’t mean too much as this is a favourable time for this company. They have had some positive announcements. He expects this to go through its resistance level and go back up to $44.

There is a nice head and shoulder bottoming and it has broken out. It looks pretty good.

(A Top Pick May 13/15. Down 21.19%.) Had what he had thought were quite solid earnings, but that didn’t stop the stock from doing a swan dive of $3 yesterday. They are building IMAX theatres in China at a very good clip, which he loves. Had their 1^st week where the box office in China was bigger than North America. Has a 20% interest in all their Chinese theatres. Are now also into home IMAX theatres in China. Probably more of a buying opportunity than a reason to be fearful.

(A Top Pick July 16/15. Down 13.29%.) He loves this. Fundamentals are outstanding. Building theatres at a great pace in China and have a huge amount of buildout ahead of them. Sold their original theatres. They are joint venturing in China and taking 20% of the top side revenue. All the big movies that are opening in China and North America are benefiting this company’s top and bottom lines.

(A Top Pick Oct 22/15. Down 21.32%.) He really likes this and what they are doing in China, but it got ahead of itself in terms of a market price and he sold his holdings several months ago. He is thinking about buying this back at some point.

Wonder Woman was the largest opening ever for a movie directed by a woman. He does not like theatres. It is expensive to take the family out and load up on popcorn and drinks.

Doesn't see a turnaround. It's suffering from the migration of people watching movies at home. So has Cineplex. Valuation is okay, but he can't warm up to it. Viewing habits have changed dramatically.

IMAX has been around a very long time, and even had takeover overtures a couple of decades ago. But it hasn't created much value. The stock is about 1/3rd the level of ten years ago. It is not too expensive (but not cheap) at 23X earnings. It has a good global brand and is recovering well from the pandemic. But debt is high, at about 4X cash flow. It showed 8% revenue growth in the 2Q, but this was a sharp deceleration from Q1, as many blockbuster movies disappointed. Q3 'should' be a bit better. EPS did beat expectations. Insiders own 17%. It is hard to get excited here. It remains at the mercy of the movie slate, and with the writer's strike the outlook is probably not great. We would consider it a weak hold, with debt and lack of value creation the main offsets. 
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