CNK Climbs as Movie Theater Ticket Sales Surge

Memorial day weekend saw a rush to the theatres

Assistant Editor
Jun 1, 2021 at 10:39 AM
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The shares of Cinemark Holdings Inc (NYSE:CNK) are up 4.1% to trade at $23.58 at last check, after Cinemark USA announced the launch of a $765 million senior notes offering. Plus, movie theaters are seeing plenty of positive sentiment as vaccinations continue, and many states have lifted mask mandates for fully vaccinated customers. Memorial day weekend saw a rush to the cinemas, with North American cinemas hitting nearly $100 million in ticket sales.

Up 35.3% year-to-date, CNK is fresh off its sixth monthly win in the last seven. Meanwhile, the $20 level has swooped in to catch recent pullbacks, with help from the 100-day moving average. 

The brokerage bunch is split on the equity. Of the eight analysts in coverage, four carry a tepid "hold" rating on Cinemark stock, with four a "strong buy." Elsewhere, though shorts have started to jump ship, short interest makes up an impressive 19.4% of the stock's available float, or over six days' worth of pent-up buying power, which could put some wind in CNK's sails, should this pessimism unwind further.

Over in the options pits, CNK sports a 50-day call/put volume ratio of 3.81 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio stands higher than 81% of readings from the past year, showing a stronger-than-usual penchant for long calls. 

These options are attractively priced at the moment, per the stock's Schaeffer's Volatility Index (SVI) of 56%, which stands higher than just 4% of all other readings in its annual range. This implies that options players are pricing in relatively low volatility expectations. 

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