Cineplex Inc (CGX.TO) Buy, Sell or Hold

Cineplex Inc (CGX.TO)

11.74

-0.08 (0.68%)

as of Jun 19, 2026, 8:00:01 pm Market Open.

297 watching

DON'T BUY

It was doing everything well and they were going to sell the business before the pandemic. Now, the business is ruined. With social distancing and lack of good movies, it is un-investable.

COMMENT

They are suing Cineworld. He does his road shows in CGX's theatres. It will be some time before people will feel safe crowding into a theatre.

WATCH

He sold before the Cineworld deal. COVID-19 was a complete disaster for movie theatres. It is too much of a mess for him.

WATCH

It is depended highly on the takeover offer. Technically the buyer has to continue with the offer but given the buyer's financial position it is unlikely they can continue. If it goes through it could mean high upside. He thinks the deal will be negotiated down some. If it does no go through, it could mean low single digits. He thinks things will come back to what they were in movie theatres. You have to be prepared with this one and to be a gambler.

HOLD

There is an offer for the company. This is probably one of his smaller positions because of the high risk. It is trading at $15 when the offer is $34. He thinks the deal will get done but not at $34. It is high risk but he likes the upside/downside. If the deal does not come through then there is lots of risk.

DON'T BUY

It's speculative, depending on this UK deal. All cinemas are closed now. Maybe they can open later, but at partial capacity. Look elsewhere.

HOLD

Being purchased? Why its trading over the $34 offer price is possibly due to short covering. There is a long period before the deal closes and Cineplex still has a chance of finding a higher bid. He would continue to hold it to tender and not sell.

SELL

It looks like they are going to be bought out by a UK company. He would sell. This is probably a decent price to sell and re-invest elsewhere.

TOP PICK

He thinks this could be a private equity take over target. Traffic to cinemas have been flat, which provides a good base and they have been adding other revenue streams. It is too cheap at these levels and the dividend is not at risk. An upside of 20% next year. Yield 7.06% (Analysts’ price target is $30.40)

WATCH

One challenge is the margin on movies makes it hard to make money. Movie going is slowing down. Better opportunities elsewhere. Free cash flow is being reinvested in things that may or may not work. Dividend may be safe, but there's no growth.

COMMENT

They report on the 14th. The stock has pulled back, but so have American cinema stocks. They have been diversifying away from cinemas, which adds debt. But long-term, management believes this is the right strategy. The Rec Room is gaining traction. She bought CGX years ago for the dividend, but their investing in other areas make her wait-and-see. Disney hits have been driving traffic. Also, concession spending continues to grow, and CGX now offers alcohol.

DON'T BUY

The chart shows that it can go further down. The motion is still down trending. The stock hasn’t been at these levels since ages. Volume is also declining so there will be more sellers in the next few weeks.

PAST TOP PICK

(A Top Pick Sep 17/18, Down 24%) He thought it was safe to buy when it had already fallen a lot. It was showing some supportive price momentum, but they missed earnings and it fell. Earnings continue to suffer and the stock is trading lower. The payout ratio is 140% of cash flow, so he exited. Yield 7.8%

BUY ON WEAKNESS

The company is still a box office play. It really depends on the film slate. The stock is at the cheapest it's been with a very high dividend. The payout ratio is very high, though it should come down to a safer level next year. He thinks they will turn around and is a good value here.

HOLD

One of the largest technology companies on the TSX. This is one of the most expensive, but even though, it trades to a hefty discount to a company like Accenture in the US. They need to have a positive book to bill ratio. They have to announce sizeable acquisitions. He is holding but has trimmed a little.

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