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Why AMC, Cinemark, and Live Nation Shares Are Glowing Green This Week

By Rich Duprey – Dec 10, 2021 at 10:27AM

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Entertainment outside the home, like movies on the big screen and concerts, could be the big winner in 2022.

What happened

The entertainment industry continues to benefit from the reopened economy that's allowed people to enjoy experiences outside their homes. Movie theater owners AMC Entertainment Holdings (AMC -1.59%) and Cinemark Holdings (CNK -3.62%), along with concert promoter Live Nation Entertainment (LYV -4.32%), are all enjoying a higher valuation so far this week from last Friday's close, according to data from S&P Global Market Intelligence.

Both Cinemark and Live Nation are each up nearly 10% from last week, and though AMC's shares had been running higher, too, they tumbled 9% yesterday after it was reported CEO Adam Aron sold another $9 million worth of his holdings. The stock is now up just 1.6% this morning from last Friday.

People at a concert

Image source: Getty Images.

So what

With the holiday season in full swing, we'll start seeing more family-friendly holiday movies hit the big screen, giving everyone a diversion from the bustle of gift shopping. Moreover, Hollywood studios also will be ramping up more-general movie fare heading into 2022.

This year was something of a mixed bag, but next year should see a greater return to normal, and moviegoers could be far more comfortable going back to theaters for the big-screen experience. 

Concerts are also likely to be more prevalent, and Live Nation was likely getting a boost this week from its acquisition of a controlling interest in OCESA, the world's third-largest promoter of entertainment events.

Live Nation notes that as of mid-October, more than 22 million tickets had been sold for its events next year, and concerts are up double digits from 2019. After being stuck indoors for so long, then having few events to choose from once bans were lifted, people want to party and are lining up to do so.

Now what

AMC is always going to be a roller coaster ride because it's a meme stock. Shares are still at sky-high levels, which seems at odds with the fundamentals of its business. Movies are recovering, but the industry isn't doing that well, and Aron selling off large tranches of stock will have traders thinking he is getting out before the crash comes.

Cinemark, on the other hand, offers moviegoers an affordable night out in venues elevating the experience, which is why some analysts see it as the best-positioned for next year. 

Live Nation is a play on the desire for people to enjoy themselves again, and with its OCESA acquisition, the concert promoter solidifies its ability to capitalize on that opportunity heading into next year and beyond. Entertainment stocks could be the big winners.

Rich Duprey has no position in any of the stocks mentioned. The Motley Fool recommends Live Nation Entertainment. The Motley Fool has a disclosure policy.

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