I am not going to tell you that the market dropped like a rock last week or that there are “stocks on sale” due to the latest drop. You have already been submerged by those kind of stories already, right? In fact, I want to talk about companies that have been deeply suffering for a while now. You may think the TSX is on sale right now, but in fact, it is only down five percent. Would you rush into the store if Boxing Day could get you five percent off of your next TV?
Source : Ycharts
I am talking about real stocks on sale that are deeply discounted.
For reasons I cannot explain, Canadian stocks, especially dividend ones, are completely ignored right now. Great companies that I found overvalued, or fairly priced at best, are now on deep discount. The worst part is that everybody is passing by the shelves and leaving them there. Halloween is in two weeks and if you sit tight, you will get spooked by stocks falling faster than kids eating candy. I have a few suggestions for the most courageous.
Cineplex (CGX.TO); a Horror Movie
Cineplex is Canada’s largest movie theatre operator with a huge market share of seventy-eight percent. Including one hundred sixty-four theatres with one thousand one hundred sixty-seven screens. With the rise of home theatre, we would have thought that the classic cinema date would become outdated. However, Cineplex was able to improve consumers experience with various combo offers, games, and VIP treatments.
As Cineplex evolved its business model toward more premium services, it enjoys not only a huge market share, but is able to generate interesting margins. Cineplex is also in line with a successful online streaming platform. Finally, CGX is gradually building a serious bond with its clients through SCENE loyalty program. From six hundred thousand members in 2006, SCENE now counts almost eight million members.
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