Sunday, November 10, 2019

Recent Purchase

    When it comes to investing in the market, an investor has to try to look for opportunities as prices vary one day to the next.  Some times they purchases will turn out to be good and others time not.  When you purchase  a stock at a lower price you are lower your possible losses and introducing a margin of safety.

   I had some cash on hand in my margin account and was looking to put it to work.  I have not added any cash to this account in several months.


Their was a run up in the stock price for the big 5 banks, so I did not feel comfortable adding to my positions at this time.  Also, Enbridge is a large part of my portfolio so that was not an option at this time.

I added to my purchase of Cineplex (CGX.TO). 
Cineplex Inc., through its subsidiaries, operates as an entertainment and media company in Canada and internationally. It operates through three segments: Film Entertainment and Content, Media, and Amusement and Leisure. The Film Entertainment and Content segment operates film theatres; and provides food and in-theatre amusement services, as well as rents theatre and digital commerce. The Media segment provides in-theatre advertising services; and designs, installs, and operates digital signage networks, as well as offers advertising on networks. The Amusement and Leisure segment operates and distributes amusement, gaming, and vending equipment; and operates social entertainment destinations comprising gaming, entertainment, and dining facilities, as well as facilitates tournaments, leagues, and gaming ladders for the competitive gaming community. The company operates theatres under the SilverCity, Galaxy Cinemas, Scotiabank Theatres, Cineplex Cinemas, Cineplex VIP Cinemas, Famous Players, and Cinema City brands. As of October 21, 2019, it operated 165 theatres in Canada, including 6 theatres and a VIP Cinemas in Saskatchewan. Cineplex Inc. was founded in 2003 and is headquartered in Toronto, Canada. (Source: Yahoo Finance)

The stock has been struggling over the past few years.  The theatre portion of the business has been dealing with declining attendance for decades. Cineplex makes alot of money at the concession stands. We all have been shocked by the price of popcorn and other snacks at the concession stands. 

Cineplex and other theatres have to complete with online streaming services such as Netflix.  People now can more easily by big screen TV such has 52 inch size.  The old TVs of that size were extremely heavy to difficult to move around in a house.  People can buy stereo systems that can give you the sound of like being a theatre.  Most people will still prefer to go to the movies, but they go way less often due to the cost.

Cineplex was been in recent years converting from a movie company to an entertainment company.  An example is the Rec Room part of their business.  Rec Room is a destination for "eats and entertainment" for adults in various cities.  These cost a lot upfront to build, so this will have a negative effect on revenue for a few years.

I added to my position in Cineplex with a purchase of 60 additional shares.  I purchased the 60 shares on November 5 at $22.33 per share for a total cost of $1344.96 including commissions. 

Currently, Cineplex pays a monthly dividend of $0.15 per share, or $1.80 per share annually.  This purchase adds $108.00 to my annual dividend income.  The yield on this purchase is 8.03%.


I previously purchased 100 shares of Cineplex at $43.85 per share for a total cost of $4389.95. These 100 shares were purchased on August 4, 2017.

The adjusted cost base of the combined 160 shares is $35.84 per share.  

I did not see any hint of insider selling in the past 6 months or so. With the upfront cost of them expanding their business into new Rec Rooms and other areas away from the movie theatres.

I would of put my money in a stock with a lower yield, if I did not already own this stock.  

I will update my investment spreadsheet in early December with this purchase.

Disclosure:  Long CGX.TO


I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.

Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk.

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