cgx – Did I Buy A Falling Knife? 80 Shares
cgx – Did I Buy A Falling Knife?
Don’t you hate that moment when you thought you made a great buy, and then the next day it tanks even lower? At the beginning of August before the 2nd quarter release cineplex stock (cgx) was trading at just under $50 per share. Even know the company increased its revenue 7.7% the stock started tanking. After the stock pulled back another 6% on Tuesday, I made the buy.
Tuesday night when I made the purchase the stock was down 24.32% since the beginning of the month. We bought 80 shares at $37.84 each in our Tax free savings account. At that price the yield is 4.44% which I have never seen cineplex offer. I felt / feel the situation is overblown, clearly movies have sucked this summer. Other than Wonder Women can you name another good one? I went and saw despicable me 3 with my son but really hasn’t been much. Was there even a Jennifer Anniston movie? Some nights we try to watch something on our android box but there is nothing worth watching. (well new movies) Also its the summer, I rather do stuff outside.
Cineplex knows it relies too heavily on hollywood producing top notch movies and are trying new ideas to branch away from that. Did you know they will be showing the Mayweather – Macgregor Match? Seems pretty cool but personally Id like some beer while watching that fight. If your a gamer they hold tourneys and stuff like that. I got to say that would be pretty neat playing mario kart, super smash bros or something like that on a massive screen. Gaming is going to become a massive industry in the future, maybe this will do well for them.
Cineplex has also started Rec Room’s. Massive Entertainment places (Toronto’s is 40,000 square feet) with a couple places to eat, drink and a huge arcade. Sounds like dave and busters but supercharged. One just opened in the Edmonton Mall, I think these will definitely produce nice profits. Sounds like a gay ol time to me. I know the radio always mentions how its a great spot for dating like their friends went there etc.
The stock has dropped another 6.5% since I bought it Tuesday night. Clearly I didn’t buy the bottom. As I’ve stated before I’m not a professional investor. While it sucks that I timed it wrong, Hollywood is going to bust out again. The next star wars comes out this December and hey who knows maybe they will continue the series and make a Joe Dirt 3. Then you know the stock will soar! Did I get ya Joe? No I’m Cool….. Classic!
While I have a android box, I still like a date night at the movies. If I decide to go to a movie its basically guaranteed I will be going to a cineplex. Maybe I’ll even check out the Rec Room and get me enough tickets for a bouncy ball or something. While I wait for the stock to return on its upward trajectory I’ll sit back and collect its monthly dividend.
Edit – I sold this stock back in 2018 and I’m glad I did. The current situation with covid is really bad for cineplex. ( cgx ) Not just because of the virus but also because movie producers are delaying their hit movies. Business should be great for rec room when this is all over but I do wonder how business in general for cgx will do moving forward.
I guess time will tell, clearly things will be a lot different moving forward.
Hey I’m Rob, creator of Passive Canadian Income.
In 2011 me and my wife had almost $60,000 in debt and a negative $7,000 Net Worth. Through hard work and financial education we paid all that off. Now we are focusing on increasing our Passive Income Streams to make the money work for us. Feel Free to Follow along the Journey by clicking the Social Media links below or subscribing to get notified of new posts on the sidebar.