A humorous look at the companies that caught our eye, for better or worse, this week
You had to know this movie wouldn’t have a happy ending. In December, U.K.-based Cineworld Group PLC agreed to acquire Cineplex Inc., Canada’s largest movie theatre chain, in a deal worth $2.2-billion or $34 a share. But within months the novel coronavirus pandemic forced movie theatres around the world to close their doors, culminating with Cineworld’s decision late last week to back out of the deal. Cineplex’s stock had sunk to less than half the offering price even before Cineworld officially pulled the plug, indicating that investors weren’t expecting any last-minute Hollywood heroics.
Headlines from the year 2024: a) Trump tears up Constitution, seeks third term; b) Fans to be allowed at NHL games; c) Shopify’s stock tops $10,000. Having soared roughly tenfold over the past three years, shares of the e-commerce software company are showing no signs of slowing down. They jumped again this week after Walmart partnered with Shopify to expand the retailer’s third-party marketplace site, and they got another boost after RBC Dominion Securities hiked its price target to US$1,000 (about $1,360.) Get the shares while they’re cheap – just 1,300 times next year’s estimated earnings!
Chembio Diagnostics (DOG)
Widespread testing is one of the keys to fighting the novel coronavirus pandemic. Of course, it helps if the tests actually work. Shares of Chembio Diagnostics shed nearly two-thirds of their value on Wednesday after the U.S. Food and Drug Administration revoked the emergency use authorization for the company’s COVID-19 antibody test kit, citing concerns about its accuracy. With analysts cutting their ratings on the stock and one brokerage slashing its 2021 revenue estimate by about 90 per cent, Chembio investors are suddenly feeling very unwell.
WW International (STAR)
So many people have packed on the pounds while stuck at home during the pandemic, there’s even a name for it: the quarantine 15. But you won’t hear any complaints from WW International investors. Shares of the company, formerly Weight Watchers International, jumped after WW disclosed that it had 4.9 million subscribers as of June 6, up 7 per cent from a year earlier, as digital subscriptions accelerated during the pandemic and hit a record high. With WW also planning to reopen about 400 studios in the United States by the end of June, investors have been fattening up their bank accounts.
Empire Co. (STAR)
Food, glorious food. Even as the economy is taking a massive hit from the pandemic, grocery stores have rarely had it so good. With many restaurant dining areas still closed and consumers stocking up on essentials, Empire – owner of Sobeys, Safeway and other supermarkets – reported an 18-per-cent increase in same-store sales (excluding fuel) and a 43.2-per-cent jump in adjusted earnings for the fourth quarter ended May 2, prompting the company to hike its dividend by 8.3 per cent. Nobody is going hungry here.
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