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The Movie Theatre Business is about to Undergo a Major Transition

The movie business is going kicking and screaming into the subscription business

HMNY and their revolutionary Movie Pass- all the movies you want per month for $9.95 (only 1 per day) is blowing up huge- just look at the 800% move in their stock price. No wonder, the co-founder of Netflix and the former CEO of Red Box is leading this new start up that promises to disrupt the way we see movies.  I think it will cause a revaluation for the entire movie theatre business as well in a positive way.  Here is some analysis and it seems RGC is the best value with the lowest Enterprise Value to EBITDA. This is a very preliminary analysis. Do your own research but there is insider buying in RGC and AMC

Ticker Company Market Cap EV-to-EBITDA
AMC AMC Entertainment Holdings Inc $1,852.30 17.56
WWE World Wrestling Entertainment Inc $1,813.44 20.69
MSGN MSG Networks Inc $1,594.07 8.47
RGC Regal Entertainment Group $2,543.90 8.19
EROS Eros International PLC $931.12 6.52
CKEC Carmike Cinemas Inc $814.58 0.00
MCS Marcus Corp $780.34 9.06
EOITF Eros International PLC $735.14 6.26
RLD RealD Inc $563.87 0.00
LIVX LiveXLive Media Inc $3,238.46 -511.02


Further thoughts on EBITA for AMC

Based on their most recent 10Q.  Assume annual EBITA would be twice  6 months EBITA although I don’t know this to be a fact.  Assume most recent enterprise value of $6,796 as reported by Guru Focus and $6.73 billion based on Yahoo Finance, I think I can average and trust the number of mourned $6.75 billion.  Then if EBITA for 12 months is $625 million our Enterprise/EBITA ratio is 10.8.  Not a steal but not a disaster either and if they can improve the business from a subscription model there could be substantial upside.

    Three Months Ended   Six Months Ended
Adjusted EBITDA (In millions)   June 30, 2017   June 30, 2016   June 30, 2017   June 30, 2016
U.S. markets (1)   $ 115.0   $ 129.8   $ 312.9   $ 276.2
International markets     20.8     (0.2)     74.0     (0.1)
Total Adjusted EBITDA   $ 135.8   $ 129.6   $ 386.9   $ 276.1

(1) Distributions from NCM are reported entirely within the U.S. markets segment.


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