Armistice Capital and Others Invest in Movie Theater and Streaming Service Stocks

Entertainment companies that offer at-home and on-site film viewing experiences have proved popular with hedge funds and other institutional investors in recent months. Theatrical exhibition company Cinemark Holdings, Inc., for instance, has received a buy rating from a half-dozen brokerages, according to MarketBeat. The Plano, Texas-based organization operates almost 500 theaters and more than 5,500 screens in 42 states in the U.S., South America and Central America.

A number of brokerages have raised their price targets for Cinemark in the past six months. In a report issued on Sept. 19, Goldman Sachs Group upped its price objective for shares of the company from $16 to $20.

On Nov. 1, Macquarie increased its price target for Cinemark shares from $32 to $34 in a separate report; and Wells Fargo & Company lifted its price objective on shares of Cinemark to $38 from $35 in a Nov. 27 research report, according to MarketBeat.

Institutional investors such as Victory Capital Management Inc. and Dimensional Fund Advisors LP increased their stake in the entertainment provider in 2024.

In the second quarter of 2024, Victory Capital Management added 35,993 shares of the company’s stock, bringing its ownership up to 2,550,819 shares — a 1.4% increase. Dimensional Fund Advisors LP purchased an additional 148,076 shares of Cinemark’s stock the following quarter, raising its total number of shares to 2,914,708.

Geode Capital Management LLC also boosted its ownership of Cinemark in the third quarter — by 1.1% — when it obtained 25,857 shares of the company’s stock, giving the asset management firm a total of 2,449,567 shares. Maverick Capital Ltd. raised its position in Cinemark even more, by 4%, with the purchase of 1,413,557 more shares of its stock during the quarter.

Global value-oriented and event-driven hedge fund Armistice Capital’s 13F filing for the Sept. 30 reporting period shows it acquired a new stake in Cinemark in the third quarter of 2024 with the purchase of 19,740 shares of the company’s stock. The movie theater chain was not listed as one of the securities Armistice Capital owned in the 13F form the fund filed for the June 30 reporting date.

Cinemark offers numerous amenities to enhance customers’ experience — such as reclining seats in theaters, loyalty programs and promotions like its new “Bring Your Own Bucket” popcorn event, aligned with National Popcorn Day, where patrons can receive an extra-large serving of popcorn for $5.

According to MarketBeat, in quarterly earnings data Cinemark published on Oct. 31, the company said it had achieved $1.19 earnings per share for the quarter — higher than the $0.58 earnings estimate — and a $921.80 million revenue for the quarter, surpassing the $894.90 million amount that had been forecast. Cinemark’s revenue was also more than 5% higher than in 2023.

Remote Viewing Options

Increased streaming content consumption — viewers now spend an average of 4.3 hours a day watching streamed videos — has helped bolster streaming service subscription and advertising revenue; and could potentially heighten the interest in streaming providers’ stock as a long-term investment, according to The Motely Fool.

Companies such as Paramount Global — which offers Paramount+ and Pluto TV, an ad-supported service — have been a focus for institutional investors such as Armistice Capital, which obtained a new position in Paramount Global in the third quarter of 2024. The hedge fund acquired 2,000,000 shares of the company’s stock.

Several other institutional investors also either acquired a new stake in the company or added to their current Paramount Global holdings in 2024.

In the second quarter of the year, for example, Poehling Capital Management purchased 40,142 shares of the company’s stock, giving it a total of 433,435 shares — which increased Poehling Capital Management’s ownership by more than 10%, MarketBeat reported.

Dimensional Fund Advisors LP’s ownership of Paramount Global rose by more than 4% during the quarter through the purchase of an additional 6,309 shares of the company’s stock, which brought Dimensional Fund Advisors’ total amount of shares up to 143,261.

In the following quarter, Geode Capital Management LLC upped its ownership of Paramount Global by more than 16% with the purchase of 35,305 more shares than it had previously owned. As of January 2025, the firm held 247,015 shares of the company’s stock.

Some institutional investors acquired a new stake in Paramount Global in 2024. Mark Asset Management LP purchased shares in the second quarter that had a value of approximately $3,351,000, according to MarketBeat.

Armistice Capital, per the hedge fund’s 13F filing, obtained 2,000,000 shares of Paramount Global’s stock in the third quarter, which was a new position for the company.

In December, Zack Investment Research noted that six analysts had given Paramount Global an upwardly modified earnings estimate for the 2024 fiscal year. The entertainment and media company’s overall operations include its streaming options, CBS Television Network — and domestic premium and basic cable networks such as MTV, Comedy Central, The Smithsonian Channel, Nickelodeon and BET Media Group.

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