Post by
infinityholder on Oct 02, 2020 11:39am
Just initiated starter position
Macros aren't looking good for this company. Regardless of another shutdown or not in Canada, people won't be watching movies with cases this high... but i'm bulish on the valuation and what I think will happen in the next few months.
With the amount of debt Cineplex has, they'll probably need to sell some real estate soon, probably a few theatres first as Rec Rooms are bringing in revenue. This is actually a good thing if they sell in hot real estate markets like Vancouver and Toronto. It'll give them quick cash and less expenses to maintain these threatres, why the world fights this pandemic and a vaccine is circulated widely next year.
At a < $500 mil market cap, this is a sensible trade looking 6 months ahead based. Will add more on weakness.
Comment by
Tommy123 on Oct 02, 2020 11:58am
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Comment by
infinityholder on Oct 02, 2020 12:12pm
I think the majority holds your view, which is why there's a major selloff. I like the risk / reward right now. There biggest issue outside of COVID is their debt, which i dont think is an issue. Their debtors will give them a chance to refinance, they just need a bt more capital. I'm betting on them closing a few theatres before end of year. Let's see.
Comment by
Contrarian333 on Oct 02, 2020 2:43pm
Hot real estate market? I don't think they own any houses. Commercial/retail space is not in a "hot real estate market".
Comment by
caretired1 on Oct 02, 2020 7:03pm
I think the only real estate they own is their head office in Toronto. I seem to recall their monthly burn in q2 was 50mm per month Even at 30 their recent financing bought them 9-12 months from then. Ie next june
Comment by
Farmer9 on Oct 05, 2020 12:27pm
You must be adding a lot of shares on the weakness today!!