Cineplex

« Back to Previous Page
▲
0
▼
♥ 0

Just wondering your thoughts on selling out of Cineplex. I originally bought in the hopes the Cine World acquisition would go through, it offered a reasonable dividend, and on some ‘FOOL’ news announcements. The pandemic hit and the price continued to drop and the dividend suspended and I continued to purchase more stock…and then more stock… and finally even more stock. I am finally on the positive side even on my most expensive share purchases so I pulled the trigger and sold.

I am not having sellers remorse (maybe a little sellers remorse) but I am curious if there is any ‘real’ rationale for the price to have climbed to the levels it is at today. Of course, I would love the company to move forward and succeed but wondering if I sold too soon. I will of course have the Capital Gain this year but I think there are simply some better plays for the money at this time.

Thoughts?

Marked as spam
Asked on February 24, 2021 7:47 am
0 views
▲
0
▼
✔
Private answer

I could see Cineplex running up a bit more, primarily based on opening news. Is it fundamentally worth the prices it's trading at right now? I don't think so.

The company recently had a bond offering, in which it issued debt at 7.50%. In this environment, with interest rates so low, a 7.50% bond is NOT indicative of a company in sound financial health. Bond holders are factoring in high risk at those rates. And not to mention, Cineplex is raising this debt, to just pay off more debt. It's just overall not a good situation to be in.

Is Cineplex a momentum play based on reopening? Absolutely. I could see it jumping in price.

But is Cineplex stock backed by a solid underlying company with sound financials? No, it hasn't been even before COVID.

Marked as spam
Posted by Dan Kent
Answered on February 24, 2021 9:24 am
« Back to Previous Page