- Discernably, there has been an increasing acceptance of online gaming platforms
- A higher volume of educational content curated on audio and video platforms is noticeable
- It is believed that there has been an increase in members and viewership for a few of these media companies
Some sectors and industries had a severely negative impact, while others benefitted from the pandemic outbreak in March 2020. The global lockdown and the closure of schools, universities, and educational institutes prompted the need to attend classes and lectures through online platforms, portals, and video conferencing. Companies curating audio and video educational-based content seem to have benefitted from the pandemic.
Moreover, membership and viewership for online gaming platforms increased during the pandemic. Entertainment companies and media houses that moved to an online platform are also believed to have benefitted. However, the entertainment industry is prone to changes in business cycles and economic shocks, which the well-informed investor must be aware of.
On that note, we explore five entertainment stocks to buy in 2021
- Boat Rocker Media Inc (TSX: BRMI)
This entertainment company curates and produces content for kids, including scripted, and family genres. Boat Rocker Media operates in countries like Canada, the UK, the US, and others. The company held a market cap of C$ 267 million and outstanding shares of 32.62 million on August 20, 2021.
Boat Rocker launched an initial public offering on March 3, 2021, and was listed on the Toronto Stock Exchange under the ticker “BRMI.” The company raised a total of C$ 170 million.
Stocks of this media scrip closed at C$ 8.19 apiece on August 20, 2021. On April 26, 2021, it reached its 52-week high of C$ 9.13. The stock price increased by 17 per cent on a quarter-to-date (QTD) on August 20, 2021.
Boat Rocker posted total revenue of C$ 62.1 million in the second quarter of the fiscal year 2021, up from C$ 51 million in Q2 FY20. Its net loss was C$ 8.8 million in the same quarter. As per the management commentary, the company managed to recover from the pandemic. The entertainment company held a price-to-earning (P/B) ratio of 1.95.
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- Score Media and Gaming Inc. (TSX: SCR)
This C$ 2.18 billion market cap media company produces digital content through its social media and esports platforms. The company engages with its fan base through its in-house media application called “theScore”.
Stocks of Score Media closed at C$ 41.37 on August 20. On this day, the stock price was trading nearly 652 per cent above its 52-week low of C$ 5.5 (September 3, 2020). Over the past year, the stock ballooned by 546 per cent.
As per the latest report, Score Media signed an agreement to lease an 80,000-square-foot space planned for retail and office.
Score Media posted total revenue of C$ 6.4 million in Q3 FY21. Its EBITDA loss was C$ 21.1 million in the same quarter. The company posted a price-to-book (P/B) ratio of 8.91.
- Cineplex Inc (TSX: CGX)
Cineplex, a C$ 787.97 million market cap company, operates business segments that fall under media, leisure, and film entertainment. This company owns and functions with a chain of movie theaters. The company held a debt-to-equity (D/E) ratio of 78.25 and 63.34 million outstanding shares on August 20.
At the market’s close of August 20, the stocks were priced at C$ 12.44, and on this day, stocks traded nearly 188 per cent above their 52-week low of C$ 4.32 (October 13, 2020).
As per the latest report, the entertainment scrip launched CineClubTM , a movie subscription program wherein members have to pay a fee of C$9.99 (plus tax) per month.
Cineplex Inc. posted total revenues of C$ 64.9 million in Q2 FY21, up from C$ 22 million in Q2 FY20, an increase of 195.3 per cent Year-over-Year (YOY). Its net loss from continuing operations was C$ 103.7 million in the same quarter.
- Great Canadian Gaming Corporation (TSX: GC)
This gambling and entertainment company offers casinos, horse racing, community gaming, and other gaming services. Great Canadian Gaming held a market cap of C$ 2.55 billion and 57.62 million outstanding shares on August 20.
Stocks of this entertainment company closed at C$ 44.22 on August 20. On April 1, 2021, it reached its 52-week high of C$ 45.03.
Over the past year, the stock price expanded by nearly 62 per cent, and on a year-to-date (YTD) basis, it only increased by close to two per cent.
Great Canadian Gaming posted revenue of C$ 70.7 million in Q2 FY21, up by 13 per cent YOY. Its net loss was C$ 27 million in the same quarter.
On the valuation front, the entertainment company held a P/B ratio of 5.52 and a D/E ratio of 5.07.
- Thunderbird Entertainment Group Inc (TSXV: TRBD)
Thunderbird Entertainment is a media or production house catering to content generated for families and kids, in drama, and multiple genres. The company held a market cap of C$ 205.91 million (at the time of writing). The investors of this company enjoyed earnings per share (EPS) of 0.12, and a P/E ratio of 35.2.
The stock price of the company closed at C$ 4.22 on August 20. It traded nearly 22 per cent below its 52-week high of C$ 5.44 (April 19, 2021). It expanded by 116 per cent over the past year.
Thunderbird Entertainment posted a revenue of C$ 37.7 million in Q3 FY21, up by 27 per cent YOY. Its adjusted EBITDA was C$ 7.4 million in the same quarter.
The entertainment industry is subjected to changes in the economy. The price of some of these stocks may be volatile, and therefore, the investor must consider the risk factors before investing.