Topic: How To Invest

Hi Pat: Thanks for all your great advice over the years. I’m interested in your thoughts on Cineplex. It has a big market position, but the P/E seems quite high. Thanks again.

Article Excerpt

Cineplex Inc., $41.60, symbol CGX on Toronto (Shares outstanding: 62.9 million; Market cap: $2.6 billion, www.cineplex.com), is the dominant movie theatre operator in Canada and the fifth-largest in North America. The company owns or has interests in 161 theatres containing 1,632 screens. Its brands include Cineplex Odeon, Galaxy, Scotiabank Theatres, Famous Players, Coliseum and SilverCity. Cineplex takes in about 70% of Canada’s total box office revenue. In the three months ended December 31, 2013, Cineplex’s revenue rose 8.2%, to $323.2 million from $298.7 million a year earlier. Higher ticket prices and concession sales were behind the gain. Its top-selling movies in the latest quarter were The Hunger Games: Catching Fire, The Hobbit: The Desolation of Smaug, Gravity and Frozen. Even with the higher revenue, earnings per share dropped 39.6%, to $0.32 from $0.53. That was due to higher operating expenses, including costs for films, food and rent, plus the cost of integrating acquisitions. The shares yield an above-average 3.5%. Cineplex is now looking at…

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