$CGX.TO - Similar valuation, considered a takeout target, has misc businesses that can be sold to delever, CEO leaving and some small activist pressure. Also worth watching.
The elephant in the room is that domestic movie tickets sold per capita peaked in 2002 and has declined by over a third since then. So the industry was a slow, secular decline even prior to the pandemic. Matthew Ball put out some good work on this a year or two ago, but there are plenty of other places to get the same info.
Also, this industry is (obviously) capital-intensive and individual cinemas tend not to be permanent assets.
These are all valid points and likely contributors to current trading multiples. It's not quite priced like a melting ice cube, but it's priced closer to secular decliner than cyclical business.
$CGX.TO - Similar valuation, considered a takeout target, has misc businesses that can be sold to delever, CEO leaving and some small activist pressure. Also worth watching.
Thanks for letting me know!
The elephant in the room is that domestic movie tickets sold per capita peaked in 2002 and has declined by over a third since then. So the industry was a slow, secular decline even prior to the pandemic. Matthew Ball put out some good work on this a year or two ago, but there are plenty of other places to get the same info.
Also, this industry is (obviously) capital-intensive and individual cinemas tend not to be permanent assets.
These are all valid points and likely contributors to current trading multiples. It's not quite priced like a melting ice cube, but it's priced closer to secular decliner than cyclical business.
I believe that Cinemark is aware of that. A new location was just built near me, and it’s only 14 screens. Gone are the days of AMC 24.