Could This Canadian Stock Be in for a Gigantic Meme Rally?
Written by Chris MacDonald at The Motley Fool Canada
Factors that made the preceding year so volatile are still lurking in the background. That said, investors might also rightly find some comic elements among the rise in popularity of various meme stocks.
Many of the so-called meme stocks that rallied hundreds or thousands of percent in 2021 are rallying again to start 2023. While Canadian theatre chain Cineplex (TSX:CGX) was largely excluded from this rally two years ago, shares of CGX stock are up nicely to start the year.
So, is a meme rally brewing for Cineplex here?
Does Cineplex fit the mantra of a meme stock?
Cineplex stock did see a nice rally during the previous meme surge seen in other competitors, particularly AMC Entertainment. Unfortunately, the smaller Canadian cousin of AMC did not see the valuation explosion of its southern neighbor. Rather, the company’s surge ended quicker, and its decline commenced much sooner than that of AMC.
That said, the fact that these two business have identical business models is intriguing. One may have expected to see CGX move more than it did two years ago. This year, the upside move in CGX stock is barely noticeable on a longer-term chart.
It appears to me that meme mania really didn’t find its way into the Canadian market, like it did in the United States. For good or bad, that still appears to be the case today.
What’s upcoming from Cineplex?
Cineplex has recently announced that it will release its fourth-quarter reports on Feb. 7. The company will host an earnings webcast to discuss the results on the same morning. Ellis Jacob, chief executive officer and president, and Gord Nelson, the chief financial officer, will jointly host the webcast. According to the analysts’ prediction, Cineplex should generate approximately $0.88 per share for this fiscal year. Let’s see if it exceeds or misses the forecast.
Cineplex and its subsidiaries function as an entertainment and media conglomerate in Canada and abroad. It is recognized as one of the Most Admired Corporate Cultures and employs over 10,000 people in Canada and the United States.
Currently, Cineplex has a stock price at the $7 level, which is quite cheap relative to its historical performance.
I’m not sure whether Cineplex has the investor base to participate in another meme rally should one be underway or not. This is a stock that looks stuck in the mud, and I expect that to remain the case moving forward.
The post Could This Canadian Stock Be in for a Gigantic Meme Rally? appeared first on The Motley Fool Canada.
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Fool contributor Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool recommends Cineplex. The Motley Fool has a disclosure policy.