Carmike Cinemas: Issues facing the Cinema Industry Don't Change the Investment Thesis
Adam Muller submits:
On April 4, 2011 I posted an article on Carmike Cinemas (CKEC) that made the argument that CKEC is undervalued. In the article I referenced several key valuation drivers:
- The value of CKEC's profit interest in Screenvision;
- The improved film slate in the second half of 2011; and
- The earnings impact of deleveraging.
The validity of the CKEC investment thesis as summarized by these valuation drivers remains very much intact despite some of the issues currently facing the broader film exhibition industry.
Early Home Viewing
This issue under debate, which has been brewing for a while, came to the forefront recently when four movie studies [Sony Corp. (SNE), Universal Pictures, Warner Brothers, and Twentieth Century Fox] announced they were going to make select movies available for home viewing early, thereby shrinking the exclusive window to only two months. DirecTV (DTV) is planning to offer the Adam Sandler Sony movieComplete Story »