# Cineplex ( CGX.TO )



## sam

hey guys , what do you think of cineplex stock? looking to buy some shares but not sure what is a good entry point for this stock ?


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## Square Root

What do you think, Sam? Prime the pump a bit.


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## DavidJD

sam said:


> hey guys , what do you think... a good entry point for this stock ?


This is odd. I looked over Sam's posts and they all seem to be asking what everyone thinks about a stock's entry point, or if it is a good buy. No idea what would be the reason for this. 

Yes Sam, CGX is a fabulous stock and at a great entry point.


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## Jaberwock

Its a good stock, but may be close to a price peak right now. It has gained quite a bit over the last couple of years, I doubt if there is much more upside in the stock price, but it is worth owning for the dividend


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## riseofamillionaire

I would like to add this one to my portfolio. Great niche, almost a monopoly, still lots of up and coming cities for growth. They are great operators, steadily raising prices.


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## alexei

Hmm, the company is paying out more than it earns:

Dividends per Share - Common Stock Primary Issue	1.28	1.26	1.26	1.28
Diluted Normalized EPS	0.86	0.93	0.97	0.56

P/E is 23.58. Also the number of outstanding shares is growing over the last 4 years:

Total Common Shares Outstanding	58.02	56.72	56.34	43.08

It is a great company but I don't think it's a good entry point right now.


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## Navigate Sensibly

I would not touch this stock right now. No reason other than valuation. Now give us your opinion Sam.


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## sam

I believe 25-26 would be a great entry point.


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## crazyjackcsa

Any particular reason for that valuation there sammy? P/E is high, and would still be up over 20 at a stock price of 25$. dividend sustainability is questionable, business is cyclical and depends upon blockbuster movies. Upside, barrier to entry is pretty high.


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## DavidJD

I find it hard to see how movie theaters are going to be profitable into the future.  I see them as video store chains. Sure a blockbuster will need to come out in a theater, but the cost for this 'experience' is rising. Home movie theaters are more common and getting cheaper and better. Everyone under 30 downloads movies - for free - and prefer to wait to see the new flick. Of course the big fan based movie franchises will bring in cash (Harry Potter, Hunger Games, blah blah). I see Cineplex being squeezed more over the next years...of course I may be dead wrong, but I see this view and the company's financials as pointing to a pass on investing in it...


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## doctrine

A more realistic stock price is $18, not $25 or even the current $28. That would give them a P/E of 15. You could stretch it a bit perhaps to $20, but is it really likely Cineplex will be growing its earnings 20% a year? I would suggest 10-15% is more likely, an a P/E of 15-17 is better.


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## PMREdmonton

I think people are overpaying for yield and recent price performance.

I think movie theaters will be profitable for a long time but I don't really see theaters as a major growth industry. I'd much rather own the content makers like Disney, Time Warner, Dreamworks Animation, etc. With emerging markets consuming more product and mobile tech allowing more consumption of entertainment on the move they should do well. I would be careful about Netflix which is getting squeezed in the prices they have to pay for content and the low barriers for entry in the field of streaming now - they can't compete with Google, Amazon and Apple here.


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## DavidJD

PMREdmonton said:


> I think people are overpaying for yield and recent price performance.
> 
> I think movie theaters will be profitable for a long time but I don't really see theaters as a major growth industry. I'd much rather own the content makers like Disney, Time Warner, Dreamworks Animation, etc. With emerging markets consuming more product and mobile tech allowing more consumption of entertainment on the move they should do well. I would be careful about Netflix which is getting squeezed in the prices they have to pay for content and the low barriers for entry in the field of streaming now - they can't compete with Google, Amazon and Apple here.


Echo that.


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## Mall Guy

PMREdmonton said:


> . . . I'd much rather own the content makers like Disney, Time Warner, Dreamworks Animation, etc. With emerging markets consuming more product and mobile tech allowing more consumption of entertainment on the move they should do well. . .


Agree 100%. In fact companies like Rogers and Bell are moving in that direction as well (own the content). The movie distributors have absolute control over the exhibitor (ie - who gets what release, when, theater location, percentage of the gate - sometimes more than 100% of admissions), and the exhibitor are now upgrading projection equipment to digital - no more "film" - as distribution is/will be by satellite = huge capital cost. The theaters do well when there is great product, and poorly when there isn't . . . those huge multiscreen complexes are geared around selling food to patrons . . . no patrons, no popcorn sales!

Just a thought . . . if you like the movie business you could play it through EMP.A which owns Canada's second largest theater chain, and you get exposure to grocery and drugs stores, gas station and convenience stores, part of a REIT and real estate development . . . lower yield, but higher EPS, and lower P/E Ratio.


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## doctrine

Empire's P/E ratio is fantastic. A great company, if you don't mind the low yield.


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## nayakkar

I owned Cineplex inside my TFSA for long time and done very well. I agree the valuation at this point is high but I think the dividend is safe. Probably there isn't much upside to the stock price but 5% yield during this low interest rate environment is all right. They are almost a monopoly after the exit of AMC and I like the fact they are diversifying into Bollywood and other language movies. Also I don't think the movie theaters are going away. Sure they will have competition from home theaters but the movie going experience is different. So I am planning to hang onto my shares.

I also own Empire and that's a great company with very good valuation.

BTW, I have been a long time reader of this forum but this is my first post.


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## 1sImage

Stumbled across this, thought I'd share.
Bought this at 33 a few months ago. It has had some good news as of late, opening and name changing 26 new theaters, record sales for last quarter pushing the stock price to just over 40 as of late.

Bringing me 120/m in dividends as well.


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## fatcat

1sImage said:


> Stumbled across this, thought I'd share.
> Bought this at 33 a few months ago. It has had some good news as of late, opening and name changing 26 new theaters, record sales for last quarter pushing the stock price to just over 40 as of late.
> 
> Bringing me 120/m in dividends as well.


i have CGX and will add more ... i hate to use the buzzword, but it does have a pretty wide moat in movie theaters and it does a really great job of up-selling and finding new ways to make money on customers that go beyond just buying a ticket

solid monthly dividend too

i bought because i really so think that moviegoing will not go out of style, when times are good people buy more popcorn and candy when times are not good they might buy less goodies but they will still go to the movies

as close to a recession proof business as you will find

though it is sensitive to whatever blockbusters are are hot or not so hot, a bad summer slate of movies can affect the stock price so if you see a good crop of films on the horizon, it might be a time to buy, but again, they are finding ways to make money on all kinds of things


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## blin10

it's too expensive right now imo


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## 1sImage

fatcat said:


> i have CGX and will add more ... i hate to use the buzzword, but it does have a pretty wide moat in movie theaters and it does a really great job of up-selling and finding new ways to make money on customers that go beyond just buying a ticket
> 
> solid monthly dividend too
> Oshawa
> i bought because i really so think that moviegoing will not go out of style, when times are good people buy more popcorn and candy when times are not good they might buy less goodies but they will still go to the movies
> 
> as close to a recession proof business as you will find
> 
> though it is sensitive to whatever blockbusters are are hot or not so hot, a bad summer slate of movies can affect the stock price so if you see a good crop of films on the horizon, it might be a time to buy, but again, they are finding ways to make money on all kinds of things


They are an extremely well ran company, when you look deep into there advertising market and there TV commercial market, they make crazy money on those things and the sponsors pay big time for those.
Even there games in the theaters make killer coin.


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## fatcat

they just bought these guys: http://ek3.com/

ek3 will allow them to extend their skill-set in commercial digital video
i believe they have some of the most modern digital cinema infrastructure around


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## 1sImage

Yes just saw that aswell.

Not to mention the head guy at cinaplex is also on the BOD for Rio can, and vice versa for the Rio can guy.
Cinaplex one of the biggest clients of Rio can, besides Walmart.


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## GoldStone

Globe and Mail today:

*Looking at movie stocks? Don't expect a Hollywood ending*

Sorry to rain on your parade. each:


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## fatcat

GoldStone said:


> Globe and Mail today:
> 
> *Looking at movie stocks? Don't expect a Hollywood ending*
> 
> Sorry to rain on your parade. each:


i viewed that article somewhat more positively, i liked this part



> Canada’s Cineplex Inc. is regarded as a pioneer in many of these areas. Its VIP areas offer bigger seats, food and wine, while its “UltraAVX” theatres feature reserved seating, wall-to-wall screens, “immersive” sound and large rocking seats. In the second quarter, Cineplex’s “premium priced product” category (which spans 3D, IMAX, VIP and UltraAVX offerings) produced 42.2 per cent of its total box office receipts.


perhaps cinemax will buy imax or imax will buy cinemax ?
i think that movies will evolve into something like a 3D sound and light extravaganza and cost of entry will go up
but i think people are still going to be going to the movies

compare it to the costs of many other forms of evening entertainment and it still looks pretty good

cinemax is nimble and they will adapt to what customers tell them, that's why i like the company


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## 1sImage

GoldStone said:


> Globe and Mail today:
> 
> *Looking at movie stocks? Don't expect a Hollywood ending*
> 
> Sorry to rain on your parade. each:


Cinaplex has a lock on Canadian market, the only company left is Empire, that's mostly because of monopolize market. 
Plus cinaplex is still making money off empires theaters. They own all the games in every empire theater, candy machines. 

As far as imax, cinaplex has plenty theaters with imax screens in them.


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## Mall Guy

1sImage said:


> Cinaplex has a lock on Canadian market, the only company left is Empire . . .


yup, bought them too!!!


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## leeder

What's going on with Cineplex? It's been down close to 8% YTD. I don't own it, but I've always kept an eye on it. Looks like it's broken the 50-day moving average. I'm trying to decide whether to initiate a position in this if this drops below $40 or add to my existing position in CU.


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## bgc_fan

Mall Guy said:


> yup, bought them too!!!


I guess with Empire theatres closed, Cineplex is the only game in town. Of course it's debatable if there are still a lot of movie goers out there.


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## HaroldCrump

There was crazy amounts of optimism built into the stock.
Late last year, it had gone up nearly 90% in 2 years.
It's forward P/E was sitting at nearly 30.
It was trading nearly 15 times FCF.

I think a little correction is natural.

They are trying to innovate, and bring in new experiences/products, such as the D-BOX, reserved seating, etc.
There is even talk of getting an LLBO license and allow booze in the theatres.
Perhaps the market wants to wait and watch, and see how those innovations turn out.

I don't own the stock, but I have looked at it a couple of times.
Always found it overvalued relative to the risks.
Those that bought in the last 2 years have done well.


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## leeder

@Haroldcrump: Like you, I've looked at this stock on and off for the past 2 years or so. I just haven't pulled the trigger b/c I always found the stock expensive. That said, I found the company attractive because it's practically a monopoly. Not to mention, when there's a good slate of movies that come out, the stock does fairly well. I'll guess I'll add to my existing utilities position...


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## fatcat

i like this company

good monthly dividend and they are good at adding value and revenue to the movie going experience

i think theatres will survive and continue to offer a relatively reasonable night out

they do well when times are good and bad

they have smart management team


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## daddybigbucks

yep its a great stock.
I bought at ~$22 and sold at $31 and regretted it every since.

if it hits $38 ill probably buy back in.


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## HaroldCrump

Yes, excellent management and even better business model.
The movie itself is the loss leader.
Sell ridiculously over-priced popcorn and soda, then make people watch advertisements for 20 mins. while they wait for the previews to begin.
It is almost as if they can afford to give the movie away for free.

On Saturday mornings they run $2.50 shows of classic movies.

The trend towards 3-D movies helps them as well.

Hollywood seems to have figured out that the safest way to make money is to keep producing juvenile serial movies, such as the Hunger Games, LOTR/Hobbit, Harry Potter, Twilight, etc.
That trend benefits Cineplex.


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## Islenska

Been very lucky here, pretty much a double and dripping in my RRSP

Bought as a yield play years ago and would just keep it for that, haven't a clue where it goes but the movie business seems rock solid with Cineplex

Our local theater just closed their doors, first opened in 1931 and supported 3 generations but I guess the time had come!


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## Spidey

leeder said:


> @Haroldcrump: Like you, I've looked at this stock on and off for the past 2 years or so. I just haven't pulled the trigger b/c I always found the stock expensive. That said, I found the company attractive because it's practically a monopoly. Not to mention, when there's a good slate of movies that come out, the stock does fairly well. I'll guess I'll add to my existing utilities position...



I'm in the same boat. I've been looking at this stock since it was in the 20s waiting for an opportunity to jump in, but the stock kept running away from me. Next big crash - this will be one that I will strongly consider.


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## Xoron

Spidey said:


> I'm in the same boat. I've been looking at this stock since it was in the 20s waiting for an opportunity to jump in, but the stock kept running away from me. Next big crash - this will be one that I will strongly consider.


I've also been looking at it closely. The valuations are just too high for basically a cash generating machine. I'm not sure how much more they can grow in the Canadian market. They basically have the entire country (with the recent acquisition of the Empire chain on the East Coast). There's only so many bums available in Canada to fill theater seats. And I think there is a limit to how much people will pay for the "premium" movie experience. 

If the P/E was in the 15-20 range, I'd be in. But at 27, just too high for me to jump in. It's certainly on my watch list though.


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## Canadian

HaroldCrump said:


> Sell ridiculously over-priced popcorn and soda, then make people watch advertisements for 20 mins.


The acquired Empire Theatres in the maritimes began operating as Cineplex not long ago (a month or two). The same soda and popcorn combo I used to buy for $12 now costs $20. The size is a bit bigger, but the price increase is ridiculous (doesn't stop me from enjoying popcorn during the movie). I ended up signing up for the Scene points card to collect points for movies and save 10% on snacks. I would say that brings in loyalty, but they do operate as a monopoly around here.

I always say that one should buy shares of a company that gouge its consumers (not sure if gouge is a good word here, but you get the point). Gee... I should pick up some shares in my RRSP once I make my contribution!


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## HaroldCrump

I love going to the movies as well, and Cineplex does provide a good experience (aside from the pricing).
I seldom pay full price for tickets and concessions.
I use Air Miles, Scene Points, gift cards, etc.
Air Miles has a combo deal with 2 tickets and regular popcorn for 300 miles (I think).
With the recent devaluation going on at Air Miles (subject of another thread on CMF), I am not sure if it's still a value prop.


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## Killer Z

This particular stock has been on my watch list for 2-3 months. From a qualitative perspective, CGX.TO appears to be well positioned, and very promising. I have not had an opportunity to perform a quantative analysis, however on the surface of it, should the price pull back to $38/share, I plan to start a position.


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## doctrine

Cineplex looks like a great company but it's all about price here. Even trying to get a P/E at 20 means you need to buy at $30, not $40.


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## Canadian

The stock is about to cross its 150 day EMA.









Downward momentum is strong too. I think it's reasonable to see $38/share or close. $38 gives the stock a trailing 12-month P/E of 25, which is still a bit rich, but reasonable given the dividend increase in 2013. I would like to see its payout fall below 90%. I think the added earnings from recent acquisitions will make that happen.


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## HaroldCrump

It is below the 20 DMA as well as the 50. 
Those are bearish signals.
But still above its 200 DMA.

However, RSI is well below 30.
The first time in over a year.
That could cause a quick pop for the stock back above the $42 range.

I wouldn't buy at these levels, either (regardless of the low RSI).
IMHO, the market is also worried about continued growth prospects.
That is probably why this stock is down even in such rising markets.


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## Toronto.gal

As a big movie-goer, this was a silly miss. How easily I once [2011] eliminated it from my potential buy list. :stupid:


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## fatcat

Xoron said:


> And I think there is a limit to how much people will pay for the "premium" movie experience.


yes there is but remember, the cost of a night out at the movies is relative to your other entertainment options, most of which are also going up

going to a film remains as a good choice for dating especially for young people and i don't see that changing

cineplex is smart enough to mix and match pricing between entrance and refreshments and upgrades and all kinds of ways to add value to the experience

of course hollywood has to come up with the basic product and cineplex will be vulnerable when hollywood goes through the inevitable down period and just can't put up the big hits

cineplex has climbed lately on the backs of some great movies ... 



> Thanks to a strong Christmas season, Hollywood is safe to begin celebrating a record year at the North American box office. With two days left to go, revenue will match 2012's record $10.8 billion sometime on Sunday, putting the final tally for the year in the $10.9 billion range. http://www.hollywoodreporter.com/news/box-office-led-by-hobbit-667856


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## Xoron

fatcat said:


> yes there is but remember, the cost of a night out at the movies is relative to your other entertainment options, most of which are also going up
> 
> going to a film remains as a good choice for dating especially for young people and i don't see that changing


Sure, but where is the growth to support the current P/E levels? My point was that they are reaching saturation levels in Canada. The only other way they can raise revenues is to charge more. And there has to be some limit as to how much people will pay to see a movie.


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## HaroldCrump

fatcat said:


> cineplex has climbed lately on the backs of some great movies


I think that trend will continue through 2014 and even 2015.
Lots of great movies in the works, such as Marvel's Avengers - II, Star Wars - VII (non animated), and of course the next James Bond.
As Xoron said above, the question is how much are people willing to pay for movies and popcorn.


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## none

Now I'm starting to feel bad about pirating the majority of films I watch. I just watched Ellen Degeneres's copy of Walter Mitty. It was OK, worth the 10 minute download at least.

http://www.hollywoodreporter.com/thr-esq/oscars-host-ellen-degeneres-linked-669909


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## HaroldCrump

none said:


> Now I'm starting to feel bad about pirating the majority of films I watch.


Wow, you have quite a colorful variety of standards around tax evasion, stealing money, and lawsuits.
You are quite a piece of work.


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## none

Thanks. I like you too.


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## fatcat

HaroldCrump said:


> I think that trend will continue through 2014 and even 2015.
> Lots of great movies in the works, such as Marvel's Avengers - II, Star Wars - VII (non animated), and of course the next James Bond.
> As Xoron said above, the question is how much are people willing to pay for movies and popcorn.


i think that they will pay whatever it takes within reason 

if the movies are socko good and the popcorn is tasty and the theater clean and inviting ... 

cineplex is smart they will figure out a way to make it work 

i suspect that even todays 10-year old, raised on ipads, video games and so on will still scream "yes" if dad or mom says "should we go to the movies tonight ?"

but, maybe i'm just old, i remember watching movies back in the 60's when you could light up and smoke a marlboro while you watched john wayne


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## urban peasant

*Cineplex (CGX.TO)*



sam said:


> hey guys , what do you think of cineplex stock? looking to buy some shares but not sure what is a good entry point for this stock ?


Hi Sam,

I have owned Cineplex for many years. They consistently reinvent what they do - operas, sporting events, classic movies. I have made over 75% over the years as well as the consistent dividend. It is one of those few stocks you can buy and put away like Crescent Point Energy (CPG.TO)

Urban Peasant


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## fatcat

the globe is interviewing vijay viswanathan, the manager of the mawer canadian equity fund and asked him for a couple of stocks he liked, one was saputo and the other cineplex
this is the brief conversation about cineplex:



> We also like Cineplex, Canada's largest movie theatre operator in Canada...
> by Vijay Viswanathan January 21 at 10:36 AM
> 
> They have a great competitive position controlling 75% of the market. If you go to the movies you are most likely going to a theatre owned by Cineplex...
> by Vijay Viswanathan January 21 at 10:37 AM
> 
> We like the resiliency of the business model which makes money not only from ticket sales but from popcorn and other concession sales as well as from all the in-theatre advertising they make us sit through before the movie starts...
> by Vijay Viswanathan edited by Darcy Keith January 21 at 10:37 AM
> 
> Couple that with a great management team led by Ellis Jacob that has been in the business for a couple decades and has done a great job of extracting “wallet share” out of patrons and creating wealth for shareholders and we are more than happy to hold this company for the long term. The company also pays a nice dividend.
> by Vijay Viswanathan January 21 at 10:38 AM
> 
> They definitely make money off the popcorn, based on the prices I've paid. But Vijay, isn't there a danger of more and more people opting for home entertainment, given cheap large flat screens and the explosion of other ways to watch motion pictures (tablets, etc)?
> by Darcy Keith January 21 at 10:39 AM
> 
> Great point Darcy, that is a risk and has been a risk for a long time...
> by Vijay Viswanathan January 21 at 10:40 AM
> 
> I think your question is best answered by something Ellis Jacob, CEO of Cineplex has said many times...
> by Vijay Viswanathan January 21 at 10:41 AM
> 
> "There is food in my fridge but I still go out to eat from time to time"...
> by Vijay Viswanathan January 21 at 10:41 AM
> Permalink
> 
> I think that is important to remember about going to the movies. It's an experience. It's a relatively low cost entertainment option and the main demographic of people going to the movies are 14-25 year olds...
> by Vijay Viswanathan January 21 at 10:42 AM
> 
> and they don't want to watch movies in their parent's house.
> by Vijay Viswanathan January 21 at 10:43 AM


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## Synergy

Earnings Release - Coming soon to a theater near you!



> 2013 Fourth Quarter and Year End results on Tuesday, February 11, 2014


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## donald

I'll second the concessions part of cgx.
It's almost a sin how much they charge for a popcorn and a drink!
freaking more for that than the movie lol
I think i paid 18 bucks if i recall!if that's not gauging i don't know what is.
sugar water and corns popped in a machine.


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## fatcat

donald said:


> I'll second the concessions part of cgx.
> It's almost a sin how much they charge for a popcorn and a drink!
> freaking more for that than the movie lol
> I think i paid 18 bucks if i recall!if that's not gauging i don't know what is.
> sugar water and corns popped in a machine.


please, next time, buy an extra coke in case you drop it on the way to your seat, then you won't have to go get back in line ... think about it, that's all i'm asking:encouragement:


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## donald

company should be called popcorn-plex,fatcat!


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## CPA Candidate

I own CGX. I bought it at $28 when most people were calling it overvalued.

The notion that people will abandon the movies to stay home and watch bluray discs is not something I accept. People want to get out of the house and going to "the movies" is something very engrained in our culture. Chances are when you went on your first date you saw a movie. That's never going to change.

It is expensive but for a high quality company that holds a near monopoly and consistent cashflows I think it's a bedrock portfolio position.


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## doctrine

For the record, I still think its overvalued. Not arguing with the company's results, just the price you have to pay for the earnings. 6% revenue and earnings growth per year seems reasonable, but quite a lot to pay a P/E of 27 for.


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## Xoron

doctrine said:


> For the record, I still think its overvalued. Not arguing with the company's results, just the price you have to pay for the earnings. 6% revenue and earnings growth per year seems reasonable, but quite a lot to pay a P/E of 27 for.


My thoughts exactly. Like I said previously: with just about 100% Canadian market saturation, the only growth can be to get more revenue per customer. And there will be some limit to how much a person (or kid or family) is willing to shell out for an evening at the movies. The movie tickets themselves aren't much in the way of revenue, the money is in the concessions. CGX would be thrilled if you just walked in the door, bought some popcorn and then left. 

To get the growth to warrant the high P/E, they'll either need to expand beyond Canada or become really creative on going outside the movie arena. I do like that they have "special event" showings like the opera or big sporting events. But there's only so much you can do with a movie theater that isn't showing hollywood movies.


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## fatcat

Xoron said:


> My thoughts exactly. Like I said previously: with just about 100% Canadian market saturation, the only growth can be to get more revenue per customer. And there will be some limit to how much a person (or kid or family) is willing to shell out for an evening at the movies. The movie tickets themselves aren't much in the way of revenue, the money is in the concessions. CGX would be thrilled if you just walked in the door, bought some popcorn and then left.
> 
> To get the growth to warrant the high P/E, they'll either need to expand beyond Canada or become really creative on going outside the movie arena. I do like that they have "special event" showings like the opera or big sporting events. But there's only so much you can do with a movie theater that isn't showing hollywood movies.


you knew they bought ek3 right ?


> TORONTO — Cineplex Inc. says its digital signage unit will get a good platform for growth in Canada and south of the border through the theatre company’s proposed friendly takeover of EK3 Technologies Inc., announced Wednesday.
> 
> EK3 of London, Ont., has operations in 32 U.S. states, as well as Canada and other countries, that provides in-store digital advertising signs. Its clients include Tim Hortons, McDonalds, Walmart, Target, and the RBC and BMO financial groups.
> 
> Cineplex has been gradually expanding its role in the media business by showing advertising to theatre-goers before movies begin as well as getting into digital signage, a relatively new and growing part of the industry.


this is a company looking at all kinds of ways to leverage their expertise ... they are a smart company which is why i stick with them

doctrine, i would rather pay more for a really good company and plan to hold it than wait around for lesser companies that present a better p/e opportunity, they may be expensive but i think their business model is worth it


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## Xoron

fatcat said:


> you knew they bought ek3 right ?


Sure, I agree they are a smart and money making company. But what % of revenues come from this recent acquisition (I haven't look at the numbers) but again, is the growth there to support the current stock price? Don't get me wrong, I like the company, but not at these prices.


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## Synergy

Q4 - Profits fall despite higher revenue



> On a per-share basis, Cineplex earned 32 cents -- well below analyst estimates of 48 cents per share in adjusted earnings


http://www.ctvnews.ca/business/cine...ite-higher-revenue-misses-estimates-1.1680378

Can't seem to pull the trigger on this one.


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## CPA Candidate

From 2012 to 2013, cashflow from operations increased from 175 to 224 million which is far more important to me than EPS.

In 2012 they had a 24 million gain on acquisition (one time item) that boosted EPS. In 2013 they had an additional 60 million in expenses related to acquisitions and higher depreciation. Margins on the box office and concessions remain steady and high.

Good opportunity to buy in my opinion. This is a long term play and earnings will fluctuate based on the films available each year. The overriding point is they are completely unchallenged in their business, the competitors are ants and people love going to movies.


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## Killer Z

The P/E is a bit high for my liking (18.3) ........however a decent history of dividend increases over the past few years ........I think this stock has a lot of growth potential ...........in summary, I'm thinking CGX could be a good pick up if it ever sneaks back around $36-$37/share.


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## Time4earlyretirement

Anyone have an opinion on this at these levels?


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## Xoron

Time4earlyretirement said:


> Anyone have an option on this at these levels?


30 P/E. Too expensive for me.


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## PatInTheHat

I don't follow CXG closely but the trend seems to be broken. Although this means nothing I seem to recall one BBN analyst is short. I would be somewhat cautious here as it is likely a best case scenario is this stays range bound for a bit. As a poster above said I would be trying to accumulate lower.


----------



## Killer Z

I am an owner of CGX, and am a fan of their business model. Looks like they are expanding their business further:

http://business.financialpost.com/2...lex-featuring-live-performances-arcade-games/

Any thoughts on this move? I am skeptical, but appreciate their attempt at growth.


----------



## fatcat

Killer Z said:


> I am an owner of CGX, and am a fan of their business model. Looks like they are expanding their business further:
> 
> http://business.financialpost.com/2...lex-featuring-live-performances-arcade-games/
> 
> Any thoughts on this move? I am skeptical, but appreciate their attempt at growth.


i used to hold them and have a lot of respect for their management ... they are smart ..nice monthly divvy

my concern is the same as with chorus, they are in industry that is ripe for creative destruction

really expensive, luxurious movies with leather seats may have a future but i think it's still a mass audience business and we are seeing huge disruption in tv's and content delivery

just a little cautious how they will navigate, great company though


----------



## Xoron

The best time to buy CGX, when the economy is in the crapper. People flock to the theaters to "escape". So when the next recession hits, load up on CGX. I'll be looking into it.


----------



## Synergy

I had this on my watch list in the recent past but I decided on DIS instead.


----------



## fatcat

Synergy said:


> I had this on my watch list in the recent past but I decided on DIS instead.


me too ... DIS has a wide moat with espn and theme parks, not to mention owning some of the best known "characters" in the industry ... i just got my yearly dividend !


----------



## Killer Z

Love this stock .......

http://www.marketwatch.com/story/ci...rd-fourth-quarter-results-2015-02-12-61731635

I'm up approx 32% with dividends since buying it last year. The P/E is quite thick, but the business model and their position in their industry is quite solid.


----------



## fatcat

Killer Z said:


> Love this stock .......
> 
> http://www.marketwatch.com/story/ci...rd-fourth-quarter-results-2015-02-12-61731635
> 
> I'm up approx 32% with dividends since buying it last year. The P/E/ is quite thick, but the business model and their position in their industry is quite solid.


i keep thinking about buying them again but i am staying away from media companies (except disney who i think are a special case) since i think there is a lot more disruption in the pipeline ... though i do like the "luxury cinema" idea that cineplex has ... they are an industry standout thats for sure


----------



## CPA Candidate

Ugh I sold this at $42.75 in November. Thought it was more or less topped out.


----------



## Killer Z

Some positive news for the movie theatre giant:

http://business.financialpost.com/investing/cineplex-sees-concession-sales-soar-to-record-heights


----------



## 0xCC

The article headline is slightly misleading. I wouldn't consider s 2.6% increase in concession sales "soaring". It is a nice increase especially considering that Cineplex enjoys 80% margins on concession sales. As a shareholder it is nice to get the increase in dividend as well. Hopefully this will be a good summer for movies with movies like Age of Ultron, Tommorland and Mad Max helping to drive both ticket sales and concession sales.


----------



## peterk

Decent company but insanely overpriced. Mild growth, 7% margins, 12% ROE, ~100% payout ratio... how the hell does that equal a P/E of 40?


----------



## 0xCC

I agree that it is expensive. I first picked this up under $30, added to it in the high $30's and am happy to hold it. I would not be willing to pay the high $40's it is trading at now though.


----------



## Islenska

Have a chunk of this which I did sell here and there but such a solid outfit that I have a core position and leave it alone

One to buy on dips for sure!


----------



## Xoron

peterk said:


> Decent company but insanely overpriced. Mild growth, 7% margins, 12% ROE, ~100% payout ratio... how the hell does that equal a P/E of 40?


That's what I can't wrap my head around. P/E is way too high for basically a cash generating machine with little growth. (I mean, how much more of the movie theater business can they get in Canada?) I can see they are trying to diversify, but there is only so much money a person will spend on a night out.

Not to mention, a slight revenue decline and you're going into debt to pay div OR cutting the div.


----------



## Killer Z

Xoron said:


> That's what I can't wrap my head around. P/E is way too high for basically a cash generating machine with little growth. (I mean, how much more of the movie theater business can they get in Canada?) I can see they are trying to diversify, but there is only so much money a person will spend on a night out.
> 
> Not to mention, a slight revenue decline and you're going into debt to pay div OR cutting the div.


They have already expanded their business with Cineplex Digital Solutions (digital signage and interactive multimedia), and have recently added "The Rec Room", which is a concept that will expand their business into social entertainment (like Dave & Busters in the U.S.). Please note that I have no opinion on whether these are viable arms of the company, however they are seeking growth opportunities beyond the basic movie theatre experience.


----------



## bgc_fan

Killer Z said:


> They have already expanded their business with Cineplex Digital Solutions (digital signage and interactive multimedia), and have recently added "The Rec Room", which is a concept that will expand their business into social entertainment (like Dave & Busters in the U.S.). Please note that I have no opinion on whether these are viable arms of the company, however they are seeking growth opportunities beyond the basic movie theatre experience.


I'll add that they also have VIP theatres that are licenced for alcohol and where you can order pub-style food to eat during the movies. A bit expensive, but an interesting experience.


----------



## Xoron

Killer Z said:


> They have already expanded their business with Cineplex Digital Solutions (digital signage and interactive multimedia), and have recently added "The Rec Room", which is a concept that will expand their business into social entertainment (like Dave & Busters in the U.S.). Please note that I have no opinion on whether these are viable arms of the company, however they are seeking growth opportunities beyond the basic movie theatre experience.


As long as they keep expanding into areas that are decoupled from their existing business, then they might have a chance. I mean where I go to watch movies, it's $50 for 2 adults just to get popcorn, drink and 2 movie tickets. I'm not prepared to spend any more on a single night out. I'll just watch it at home when the price gets too high.

But that being said, earnings would have to more than double, for the P/E to come down to a decent level. They just don't have the growth to support it and one or two bad quarters could really impact the stock price. If you're buying for the yield, then you had better be in it for the long run.


----------



## 0xCC

Xoron said:


> Not to mention, a slight revenue decline and you're going into debt to pay div OR cutting the div.


This is a very valid point. In their last quarter their reported free cash flow was $0.436/share and the dividends they paid out was $0.375 so they are sitting at a payout of 86% of free cash flow. That doesn't include the increase in the dividend they announced which will put their dividends at $0.39/quarter.

I wonder how much of their costs are variable vs. fixed so that if their revenue does decline for whatever reason can they scale their costs quickly so that they can keep their free cash flow numbers roughly the same? I think that would be the only way they could keep their payout ratio from going over 100% of free cash flow.


----------



## Xoron

0xCC said:


> I wonder how much of their costs are variable vs. fixed


I think an awful lot are variable.
- Theaters - Leased
- Theater Employees - Mostly part time, could reduce workforce quickly if needed
- Buy less popcorn / soda if viewership declines
- Cherry pick movies to show to get max revenue per film

Probably only fixed costs are corp salaries and hard assets to support those corp jobs.


----------



## OurBigFatWallet

I'm always amazed at how Cineplex manages to increase their ticket prices by small amounts so often. I don't go to movies often (4-5 times per year) but it seems like almost every time I go it's gone up in price by $0.25 per ticket. Last week a movie was $13.25 per ticket. Plus popcorn. And pop. 

On one hand good for them for increasing their revenues but on the other hand there has to be a limit somewhere. The alternatives people mentioned above (netflix, downloading movies, home theatre systems etc) are all real threats to Cineplex's growth.

Not sure if I'd call the current prices inflated but if they keep raising at this rate they will be soon.


----------



## nathan79

OurBigFatWallet said:


> I'm always amazed at how Cineplex manages to increase their ticket prices by small amounts so often. I don't go to movies often (4-5 times per year) but it seems like almost every time I go it's gone up in price by $0.25 per ticket. Last week a movie was $13.25 per ticket. Plus popcorn. And pop.


You guys in Ontario have the HST, which adds a significant amount to the ticket price and the price of concessions.

A regular movie at my local Cineplex is $10.99 including tax. If I go one town over, they charge $10.75. There are extra charges for things like 3D and UltraAVX (bigger screen and sound), which often do increase the price to $13 or so. Sometimes you have a choice of regular or 3D, AVX, etc. With the SCENE card every 11th movie is free and you can use that for any movie on any screen including 3D and IMAX.



OurBigFatWallet said:


> Plus popcorn. And pop.


Eat before going. I rarely (maybe once or twice a year) buy a pop, and I might split a small popcorn with someone (who can honestly eat the whole thing, let alone a large size?). Instead of pop I usually get a tea, which costs only $2.05 with the SCENE card.


----------



## milhouse

Any updated thoughts on Cineplex? Their SP has gotten pummeled of late with the latest quarterly results being pretty horrible in terms of earnings. As a result, their P/E is over 30 but their dividend is over 4.6% too. David Berman wrote a piece in today's G&M which outlines the risk but sounds fairly optimistic.


----------



## fatcat

milhouse said:


> Any updated thoughts on Cineplex? Their SP has gotten pummeled of late with the latest quarterly results being pretty horrible in terms of earnings. As a result, their P/E is over 30 but their dividend is over 4.6% too. David Berman wrote a piece in today's G&M which outlines the risk but sounds fairly optimistic.


i read that article, i think he was assuming that the "disruption", meaning netflix would eventually pass and cineplex would rebound ... i used to have them and the divvy is nice and looks sustainable but the question i have is why them when you have other good companies ?

i dropped them for same reason i sold corus, these are businesses and industry segments that are going to be facing disruption for a long time to come ... media delivery is changing, advertising is changing

cineplex is banking on a very upscale, luxury, "date night" product (as well as their advertising piece) and maybe it will work but maybe it won't ... i just don't see a compelling story ... if i wanted to get into that segment i'd buy netflix ... but of course netflix doesn't pay a divvy


----------



## milhouse

Thanks for the insight.
I guess the appeal for me is that I want to diversify the dividend growers component of my portfolio which is currently too concentrated on pipelines, financials, telecoms, and utilities. I am kind of curious what kind of positive impact their involvement in e.Sports can have on their earnings.


----------



## fatcat

milhouse said:


> Thanks for the insight.
> I guess the appeal for me is that I want to diversify the dividend growers component of my portfolio which is currently too concentrated on pipelines, financials, telecoms, and utilities. I am kind of curious what kind of positive impact their involvement in e.Sports can have on their earnings.


interesting, did not know about that ... gaming is really becoming a participator sport, i know twitch is a big deal

based on the cost of the investment it seems a smart idea but i don't think the revenues are going to add much to the top line though i could see a lot of growth down the road

they are trying to multi-purpose their theatres which is also smart

will people like to go out and have pricey, luxury movie nights with drinks and comfy chairs ? they are now but whether they will in large numbers in the future, who knows ?

as far as divvy diversification, go down south and buy a healthcare or 2 and a consumer staples or 2


----------



## doctrine

Forget what else they are doing, 90% of CGX is movies, so best to focus on that. And the stock is expensive. Look at what is happening to AMC. CGX is holding up comparable well, perhaps due to their more dominant position, but the potential bottom is a long way down.


----------



## milhouse

I love the concept of a company being able to kind of reinvent their business. But you guys are likely right in that it's likely too much of a risk that I'd want to take compared to other options out there.


----------



## kelaa

I love the movies and the price of the tickets even full price is not a big deal for me. But what I cannot stand at least at my local theatre is the terrible projection brightness (likely due to projector being configured to run 3D all the time). The last two Cineplex movies I watched were Rogue One and La La Land. It's a shame that the directors of photography and the production teams spend so much effort, only to have all the result nullified by the theatre because they won't retain actual projectionists. Why would I continue to pay money for a terrible experience?


----------



## like_to_retire

kelaa said:


> I love the movies and the price of the tickets even full price is not a big deal for me. But what I cannot stand at least at my local theatre is the terrible projection brightness (likely due to projector being configured to run 3D all the time). The last two Cineplex movies I watched were Rogue One and La La Land. It's a shame that the directors of photography and the production teams spend so much effort, only to have all the result nullified by the theatre because they won't retain actual projectionists. Why would I continue to pay money for a terrible experience?


Yeah, you lose a lot of light with the 3D system. There are projectors that swap lenses depending on whether its a 2D or 3D film being projected, but not all theaters use them. 

Personally, I avoid 3D if at all possible. The experience is much better in 2D. The clarity and brightness of the picture is superior in 2D and I don't have to wear those uncomfortable 3D glasses. If you're someone who normally wears glasses, they will understand how uncomfortable wearing another pair on top of them is.

I do like the new theaters with the premium seating. That's certainly worth the few extra dollars. It's as good as my lazy boy at home with the nice electric buttons to adjust your position and gads of room. Even with the seat fully extended, there's room for someone to walk down the isle. Looks like there's about half the seating capacity now, so of course they recoup by charging more. Worth it to me.

ltr


----------



## OptsyEagle

I try to avoid 3D, since in most cases it is really just a large price increase to the movie. In most movies the 2D is the better experience, but would have much lower profit margins for the players involved.

Someone has to put a stop to these capitalist pigs. lol.


...and don't get me going on the price of their popcorn.


----------



## robfordlives

This keeps trending downwards and I sold my position recently. Their venture into Rec Room is expensive and risky in my opinion. Payout ratio greatly exceeds 100%, they do not control their own destiny (ie dependent on hollywood releases) and PE at nearly 30 is too rich for a declining business. Also, does not look like a great box office coming up in 2018 and then tack on the Netflix affect where perhaps people are starting to netflix and chill at home more on large screens versus venturing out at $40 for two tix and pop


----------



## bgc_fan

As àn aside, you do know that Netflix and chill doesn't actually mean watching Netflix right?


----------



## fatcat

i used to own these guys and loved their divvy

think they are a pretty solid theatre chain and a smart company (and they have digital signage and now esports but they are still a movie house) 

but this is in the shadow of the "netflix / farenheit-451 effect", eye-popping 75 inch screens that soon will be like a $1000 or less and people are more and more asking whether the steadily rising ticket prices and parking and noisy theatregoers is worth the hassle

they are trying to come up with an ultra luxury theatre experiences of cushy seats and better food and so on but i think it's beginning to look like a long shot 

i put them in the corus category, too dependent on media consumption patterns that are becoming outdated


----------



## bgc_fan

They are also going in another route as well. They started launching new entertainment complexes which seem to be a throwback to old arcades, but combine restaurants and bars. If you have been to the US, they are patterned after the Dave and Buster's restaurants. We don't really have these type of places anymore, so maybe it will fill a void.


----------



## fatcat

bgc_fan said:


> They are also going in another route as well. They started launching new entertainment complexes which seem to be a throwback to old arcades, but combine restaurants and bars. If you have been to the US, they are patterned after the Dave and Buster's restaurants. We don't really have these type of places anymore, so maybe it will fill a void.


which effectively makes them a startup, right ? :redface-new:


----------



## bgc_fan

fatcat said:


> which effectively makes them a startup, right ? :redface-new:


Well, what's old is new again.

At least they didn't rename themselves as Cineplex Blockchain, or make an announcement that they would start using blockchain technology for their Scene rewards like Kodak.


----------



## chantl01

What is going on with this stock? It is down 24% in the past month. Whenever I go to the theatre, it still seems like they're doing good business. Are their revenues down enough to warrant this kind of decline in the stock?


----------



## doctrine

Cineplex, even now, is a very expensive stock, and has been for quite a while. Should a company with flat or maybe even slightly declining revenue trade at 25 or 30 times earnings? It could come down quite a lot more. AMC in the US fell 60% in the last year. A similar drop in CGX would put it below $20/share, and it started from a higher earnings multiple.


----------



## SixesAndSevens

1 movie night at cineplex for a family of 4 is basically = monthly mortgage payment.
overpriced movies and even more overpriced popcorn.

this is a slowly declining sector.
they are feverishly trying to make up for declining seat count by increasing their average spend per customer.
the debt on their balance sheet has gone up by nearly 50% in last 18 months.

this stock should be between $15 - $20 at most.

I like to short sell it but the market can stay irrational longer than I can say solvent.


----------



## CPA Candidate

I think the stock is attractive now and have been buying. The market tends to swing from too bullish to too bearish, and I think that has occurred with CGX. At over $50, it was overvalued, but now it is reasonable.

I think their is a tendency to forget that CGX is a borderline monopoly in Canada, it is not going to trade at a low or even market multiple.

In addition, the company has been evolving into a broader entertainment company which will eventually be only 1/3 theatre. The company absorbed significant startup costs in 2017 related to the Rec Room rollout. I suggest peaking into the financials and not relying on 200 word articles that and written to generate clicks for Motley Fool. Those authors are not doing any real analysis.

In relation to this company people will often point out in that it is secular decline, as if this is something that isn't widely known (theatre ticket sales have been declining for almost two decades). There is a tendency to completely dwell on this part of the business but it is something that they managed extremely well. There are also new opportunity to generate revenue using the theatres, such as PPV events (concerts, fights, etc). Now that they have an attached bar, they are an alternative to regular bars for this type of entertainment (and quite superior I might add).

I also do not see home viewing a perfect substitute for viewing a movie at a theatre, you can never duplicate the size of the screen or the social aspect. Maybe I'm old fashioned at 38 and can't understand the kids these days, but I like to get out of the house and I feel many people are the same.


----------



## like_to_retire

CPA Candidate said:


> I think the stock is attractive now and have been buying. The market tends to swing from too bullish to too bearish, and I think that has occurred with CGX. At over $50, it was overvalued, but now it is reasonable.
> 
> I think their is a tendency to forget that CGX is a borderline monopoly in Canada, it is not going to trade at a low or even market multiple.
> 
> In addition, the company has been evolving into a broader entertainment company which will eventually be only 1/3 theatre. The company absorbed significant startup costs in 2017 related to the Rec Room rollout. I suggest peaking into the financials and not relying on 200 word articles that and written to generate clicks for Motley Fool. Those authors are not doing any real analysis.
> 
> In relation to this company people will often point out in that it is secular decline, as if this is something that isn't widely known (theatre ticket sales have been declining for almost two decades). There is a tendency to completely dwell on this part of the business but it is something that they managed extremely well. There are also new opportunity to generate revenue using the theatres, such as PPV events (concerts, fights, etc). Now that they have an attached bar, they are an alternative to regular bars for this type of entertainment (and quite superior I might add).
> 
> I also do not see home viewing a perfect substitute for viewing a movie at a theatre, you can never duplicate the size of the screen or the social aspect. Maybe I'm old fashioned at 38 and can't understand the kids these days, but I like to get out of the house and I feel many people are the same.


Completely agree with your assessment.

ltr


----------



## robfordlives

Heard of Landmark? They have opened up some new cinemas to rave reviews. Noone will go to a Cineplex if there is an option between the two. PE near 30 is still too high for a declining business. 12X sounds good. How has the Dave and Buster's model worked out in the US??


----------



## OutofBounds

It's interesting to see discussion of Cineplex on this board and I don't know how I missed this thread. I'm not invested in their stock at all and honestly I don't see myself ever doing so. Here's why. 

I'm under 30 years old. I socialize with people plus or minus 5 years of my age in general. I see a declining trend in movie going. The sky rocketing prices make it too costly for many millennials, especially those with kids. Also, modern home theater technology is improving by leaps and bounds. High quality, large screen televisions and sound systems are coming down in price. A $2000 one time investment will get you a pretty awesome set up. 

Netflix, Amazon Prime, Terrarium, Kodi, torrents etc are cheap and easily available while providing HD quality. Add to that the fact that one doesn't have to deal with uncomfortable theater seating (VIP screenings aside), noisy patrons, sticky floors and high priced food, the desire to go the theater just isn't there anymore. Our friends and us will often go out for a dinner together then go back to someone's home and watch the latest blockbuster there instead of going to the theater like we used to. 

I for one also haven't paid to see a movie in a theater or for popcorn etc for years. Cineplex teamed up with Scotiabank and offered SCENE points which can be redeemed for tickets and concession. Seeing as I refuse to set foot in a theater unless it's the VIP screen and the nearest one is in Edmonton, we only got to 1 or two shows a year. I currently have over 41,000 points. That's enough to get me and my woman into roughly 15 VIP movies AND get us popcorn and drinks at each one. Alot of people my age also use the SCENE points for the tickets and don't bother buying concession. I simply don't see how Cineplex makes money off that model. 

Anyways, that's my 2 cents...


----------



## newfoundlander61

Cineplex to be acquired by U.K.'s Cineworld for 2.15 billion:

https://www.bnnbloomberg.ca/cineplex-to-be-acquired-by-u-k-s-cineworld-for-2-15-billion-1.1363109


----------



## CPA Candidate

Cha-ching.

Nice when you wake up in the morning $10k richer than you went to bed. So juicy watching the shorts take it on the chin.


----------



## jargey3000

sweet! wish i had some


----------



## doctrine

Good for anyone who bought in the last 12 months. But don't forget this was a $53 stock just in 2017. Anyone who owned then is looking at a 30% permanent loss of capital even after this 40% jump. You had to have owned this stock since 2013 otherwise to be in the green.


----------



## jargey3000

whew! glad i had none!


----------



## bgc_fan

Looks like the deal fell through. U.K. Exhibitor Cineworld Terminates Deal To Buy Cineplex Of Canada


----------



## james4beach

bgc_fan said:


> Looks like the deal fell through. U.K. Exhibitor Cineworld Terminates Deal To Buy Cineplex Of Canada


Ouch. This stock had not been on my radar but man has this one been affected by the pandemic. It started the year at the M&A price of $34, seemingly a "done deal" until the pandemic.

Was the news already baked into the current price, or did this press release come out after the market close? There was no significant move today.

Since it's already 59% below the previous buyout price, maybe this is "old news".


----------



## bgc_fan

Not that old. Up until a month ago, it was looking like it still would have gone through. But it seems Cineplex didn't meet some of the conditions for the merger. So even after the shutdowns occurred in the early times of COVID, it seemed like a likely deal.


----------



## doctrine

CGX will drop for sure. Their fate depends on whether people go back to movie theatres. They were profitable before, but they did have a decent pile of debt. CGX does have a virtual monopoly on theatres in Canada. So maybe there is a price where it is a deal. It's much lower for me though. It's at 1.4 times book now and I would think it could trade below book value.


----------



## james4beach

I was reminiscing with a buddy just yesterday about how we used to go to the movies as teenagers. Around 1998 and 1999, we used to find coupon deals and go see movies for $1 or $2.


----------



## nathan79

james4beach said:


> I was reminiscing with a buddy just yesterday about how we used to go to the movies as teenagers. Around 1998 and 1999, we used to find coupon deals and go see movies for $1 or $2.


Around here we used to have cheap theatres that showed movies after they finished running in the main theaters. One dollar was the _regular_ price! I used to go to the ones in Langley and New Westminster... both long gone. The price eventually went up to $2 as I recall.

Nowadays, movies come to Blu-ray and streaming so fast, there's less of a market for these cheap theatres. It used to take about a year for a movie to come to video, so these cheap theatres were an attractive way to catch a new release for a good deal.

Maybe we need to see a return of cheaper prices to attract people away from streaming services. I think millennials would flock to theaters if it was affordable. Watching a movie at home isn't much of an experience, and millennials value experiences.


----------



## james4beach

nathan79 said:


> Maybe we need to see a return of cheaper prices to attract people away from streaming services. I think millennials would flock to theaters if it was affordable. Watching a movie at home isn't much of an experience, and millennials value experiences.


I used to go to the movie theater because it was a fun outing, or a date. The moment the ticket prices shot up, it was clear they weren't going to be able to keep doing this. Me, and everyone I know, stopped going.

I think that entire industry got way out of touch with what is affordable and desirable, or how much their entertainment is worth. A fun flick is worth $1 or $2 (or let's say $3 after inflation today) but it's not worth $15 a ticket.

Even before coronavirus, that's why nobody was going to theaters and why people started watching at home. There were always options to watch out home (like VHS rentals) so I would say DVD rentals or streaming was not the game changer here.

Back in the 90s, when I compared a VHS rental at home to spending $1 to go out to the movies, I would go out -- because it's worth that much.

But movies simply are not worth $15 at the theater. They got greedy, and now their industry is dead.


----------



## londoncalling

james4beach said:


> I used to go to the movie theater because it was a fun outing, or a date. The moment the ticket prices shot up, it was clear they weren't going to be able to keep doing this. Me, and everyone I know, stopped going.
> 
> I think that entire industry got way out of touch with what is affordable and desirable, or how much their entertainment is worth. A fun flick is worth $1 or $2 (or let's say $3 after inflation today) but it's not worth $15 a ticket.
> 
> Even before coronavirus, that's why nobody was going to theaters and why people started watching at home. There were always options to watch out home (like VHS rentals) so I would say DVD rentals or streaming was not the game changer here.
> 
> Back in the 90s, when I compared a VHS rental at home to spending $1 to go out to the movies, I would go out -- because it's worth that much.
> 
> But movies simply are not worth $15 at the theater. They got greedy, and now their industry is dead.


----------



## bgc_fan

FWIW, drive-in theatres are coming back in style. Kind of fits the social distancing and still provide some of the old time nostalgia.


----------



## londoncalling

I would agree that the prices for this type of entertainment has escalated. I rarely go to a theatre (a few times a year) and never pay full price (matinee, or Tuesday or 2nd run). I used to be a frequent movie goer as a young man. I still see many taking in this experience when I go by a cinema so perhaps its just a change in demographics and choice of entertainment spending. 

A few points to consider:

The technology has significantly changed resulting in better effects, better sound and better viewing experience (both in the home and out in public). However, the cost of film production has also climbed lockstep with ticket costs. I am not saying they are correlated but pointing out the observation.

One should also consider pricing for other entertainment costs to keep things in perspective. Have you seen the difference in the price of attending a pro sporting event or concert in recent years? Prices for these events have also skyrocketed. Again you can view these things for considerably less at home but many choose to pay an arm and a leg for these experiences. I typically attend a few pro sporting events and big venue concerts a year as well. Although movies, sports and concert events may seem pricey. Is it really? How much does it cost for a dinner for a couple and a few drinks and dessert? 

Some are willing to pay for these things without batting an eye because we live in a consumer society. I am unsure how things will be different post pandemic as there is a great number of people that have not been allowed to do a number of things for the past few months.

Cheers


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## milhouse

$15 a ticket is pushing the upper limits for me too but we usually get in on a group/mass buy of admission certificates that gets the price to about $10 a ticket. There's an expiry date on them but I've used a few of these certificates 5 years past expiry with the only effort being that the cashier needing to call a manager over who just gives a thumbs up. It's a pretty cheap night out for us. We'd probably go more often but not enough movies are appealing enough for us or we feel is better to watch in a theatre versus the comforts at home.

Agree with LC's comment about ticket pricing of sporting events, concerts, or a fancy meal out. I end up paying over $100 a ticket to go watch the Canucks once or twice a year with buddies in the upper bowl. While it's more of a social thing, it's kind of random if it's a good game or ends up being a dog. Last year, the missus and I paid just over a $100 a ticket for floor seats for a concert and had a great time. So, comparatively, $10 a ticket for an albeit simple night out isn't too bad IMO.


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## alexincash

Your theatres did not ever offer half-price movie days? No matter where I used to live in the GTA I could always find half-price tickets once per week on a weekday, usually cost me around $8 to see a movie.


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## james4beach

Just brutal! CGX crashed *29%* on Monday. One of the world's largest cinema operators announced it is temporarily closing all theatres in US & Britain. CGX is down 70% since the highs of this summer.


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## londoncalling

I remember in 08-09 this stock doing well as people needed to find affordable escapes. Just goes to show there will always be event that affect an industry or a sector and money will flow to somewhere else during that time even if it is just to the sidelines.


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## doctrine

CGX used to trade at 5 times+ book value. Incredibly expensive at $50/share. At $4.83 a share, it's now at book value, which in itself could still be stressed. 

CGX was a profitable company but even so assuming it survives and can service it's debt, I'm not sure it's at a discount even at this price. However, it's certainly a better opportunity here than when it was 2 times book value even just a few months ago.


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## james4beach

Does anyone think CGX could start rallying like crazy, parallel to AMC in the US?

The chart has improved in the last couple weeks and CGX is now above its 200 day moving average. As a stock that was previously beaten up very badly, the chart doesn't look that bad.

I think there's a possibility it could get swept up in the speculative market mania. Valuation does not matter to these kinds of traders. Currently it's $11.18 (market cap $708 million) but I'm very curious to see what happens in the coming days.


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## m3s

james4beach said:


> I think there's a possibility it could get swept up in the speculative market mania. Valuation does not matter to these kinds of traders.


I don't think anyone is speculating that these stocks should be worth more

Rather they are targeting stocks that are being shorted. If they can pump it enough to force the short sellers to buy it creates a short squeeze.

So is CMF pumping CGX today?


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## james4beach

m3s said:


> So is CMF pumping CGX today?


I doubt CMF is pumping anything, but Cineplex is up over 6% on very heavy volume today ... so clearly, the speculators have started buying it. Probably doing a parallel to the AMC trade.

What do you think, might it go up another 10% tomorrow?


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## Eder

Maybe go here to find out









r/wallstreetbets


r/wallstreetbets: Like 4chan found a Bloomberg Terminal




www.reddit.com


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## nathan79

AMC (NYSE:AMC) Stock Is Surging: Is Cineplex (TSX:CGX) Next?


Reddit users are targeting AMC Entertainment Holdings Inc. (NYSE:AMC) stock. Could Cineplex Inc. (TSX:CGX) be on their radar?




www.fool.ca





I hope so for the sake of my position, lol.


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## MrBlackhill

nathan79 said:


> AMC (NYSE:AMC) Stock Is Surging: Is Cineplex (TSX:CGX) Next?
> 
> 
> Reddit users are targeting AMC Entertainment Holdings Inc. (NYSE:AMC) stock. Could Cineplex Inc. (TSX:CGX) be on their radar?
> 
> 
> 
> 
> www.fool.ca
> 
> 
> 
> 
> 
> I hope so for the sake of my position, lol.


It won't happen. GME situation was pretty unique. It's also happening to AMC because it also has high short % of float, but nowhere near GME.

CGX.TO? Why would they care about this Canadian stock with low short %? The best you'll see will be just some unjustified bullish move.

It worked out a bit with BB because it's also trading in NYSE and it had a bit of shorts, but I don't believe it can lead to another unprecedented short squeeze.


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## james4beach

MrBlackhill said:


> It worked out a bit with BB


I'll say more than "worked out a bit". This is the highest BB has been in 11 years. It just increased the value of the Ontario Teachers pension by $400 to $500 million!

But it's true that CGX is not dual listed, so doesn't benefit from American gamblers.

In my growth portfolio I actually target stocks that are only listed in Canada, exactly for this reason... to avoid American hedge funds and speculators.


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## MrBlackhill

james4beach said:


> I'll say more than "worked out a bit". This is the highest BB has been in 11 years. It just increased the value of the Ontario Teachers pension by $400 to $500 million!
> 
> But it's true that CGX is not dual listed, so doesn't benefit from American gamblers.
> 
> In my growth portfolio I actually target stocks that are only listed in Canada, exactly for this reason... to avoid American hedge funds and speculators.


Yeah, when taking BB relative to itself, that's true, but I was talking relative to the uniquely insane short squeeze of GME.

Don't get me wrong, BB soaring +250% in a month is incredible. But compared to GME's +1500% in a month... Or GME's +7500% in 6 months compared to BB's +400%...


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