3 Canadian entertainment stocks to buy this fall

Highlights

  • One of the companies listed below posted a price-to-earnings ratio of 41.50.
  • One of the stocks mentioned here soared by more than 208 per cent in the past year.
  • A stock among them surged by about 50 per cent in the last one month.

The COVID-19 pandemic hit some sectors and industries severely, however, at the same time, it benefitted and expanded the opportunities for some companies like online media platforms and eGaming sites etc.

The subscriptions and viewership under such platforms have seen demand since the pandemic started. Some entertainment companies and media houses that modified into the online entertainment business were also expected to gain from the pandemic situation.

However, with the improvement in vaccination rates and easing of Covid protocols, the movie theater business in the entertainment industry is also slowly coming into the picture.

Also read: Top 3 Canadian dividend penny stocks to buy before 40

On that note, let us discuss the stocks of some of the Canadian entertainment and media companies.

3 Canadian entertainment stocks to buy

1.    Cineplex Inc (TSX:CGX)

The Canadian media and entertainment firm Cineplex saw its stock closing at C$ 14.27 per share, on Tuesday, October 12, up by 0.07 per cent. At this point, its stock was priced nearly 15 per cent below its 52-week high of C$ 16.76 on June 17.

The CGX stock soared by more than 208 per cent in the past year and grew almost 54 per cent on a year-to-date (YTD) basis. Its stock dipped by approximately eight per cent in the last three months, however, it seems to be on the path to recovery as it increased by almost 11 per cent in the past month.

Cineplex Inc (TSX:CGX)’s financial results Q2 2021

Cineplex, in the second quarter of 2021, recorded a year-over-year (YoY) increase of 195.3 per cent in its total revenue to C$ 64.9 million.

The reduced mandatory closures and easing of capacity restrictions helped the entertainment company to improve the box office businesses. The company reported box office revenues of C$ 12.5 million, in its latest quarter.

The company reported food delivery revenues of C$ 3.7 million in Q2 2021, up from that of C$ 3.3 million in the same period of 2020. The total registered users expanded by 19 per cent to 2.1 million in this quarter.

The company posted a YoY growth in media revenue of 50.3 per cent to C$ 2.4 million in the latest quarter. The revenues from amusement solutions also marked an increase of C$ 18.5 million to C$ 22.2 million from the previous year’s quarter.

At the time of writing, Cineplex held a price-to-cash flow (P/CF) ratio of 9.50 and debt-to-equity (D/B) ratio of 78.25.

Also read: Sundial (SNDL) to acquire Alcanna (TSX:CLIQ), stocks soar. Buy alert?

2.    Thunderbird Entertainment Group Inc (TSXV:TBRD)

The stock of Vancouver-headquartered multi-platform media house Thunderbird Entertainment Group Inc witnessed an increase of more than 138 per cent in the past year. Its stock soared by almost 53 per cent in the last nine months and expanded by about 60 per cent on YTD basis.

At market close on Tuesday, October 12, Thunderbird’s stock was priced at C$ 5.12 apiece, up by 2.811 per cent. At this closing price, its stock was almost six per cent below the 52-week high of C$ 5.44 on April 19.

Thunderbird, on the third quarter of fiscal 2021, posted a 27 per cent YoY growth to C$ 37.7 million in its revenue. This rise was primarily due to an increase in production services for kids and families.

The production services revenue jumped by 52 per cent to C$ 19.4 million in Q3 2021, which mainly resulted from an increase in the number and size of contracts, up from the same period of 2020.

The company recorded an adjusted EBITDA of C$ 7.4 million, marking a YoY increase of eight per cent, which resulted from the increase in production services as well as licensing and distribution revenue. The entertainment house stated a free cash flow of C$ 1.8 million and production backlog of C$ 102.2 million in Q2 2021.

Thunderbird stood with a P/E ratio of 41.50, a price-to-book (P/B) ratio of 3.879 and a price-to-cash flow (P/CF) ratio of 8.70, on Wednesday, October 13.

The company announced that it will be filing its fourth quarter financial results for the fiscal year 2021 pre market on Wednesday, October 20.

3.    Network Media Group Inc (TSXV:NTE)

The stock of the Canadian television and production firm Network Media Group Inc noted a surge of about 50 per cent in the past month. Its scrip soared by approximately 20 per cent in the last year and increased by roughly 29 per cent in the past three months.

Network witnessed its stock wrapped up at C$ 0.18 per share on Tuesday, October 12, down by 5.263 per cent. It scored its 52-week high of C$ 0.21 on October 4, more than 14 per cent above the current price.

The Vancouver-based entertainment firm reported contracted future revenues of C$ 15.6 million in the second quarter of 2021. In addition, Network Media signed with world-class leading talent agency ICM Partners to represent the company globally.

Network posted a P/B ratio of 1.636, P/CF ratio of 5.70 and D/E ratio of 0.29, at the time of writing.

Also read: Top 3 events to follow in Canadian markets on October 12

Bottom line

Investors should keep in mind that the entertainment industry is vulnerable to changes in business cycles and economic shocks, which makes some of these stocks volatile. Investors should consider the risk factors attached with investment in these stocks.

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