2 TSX Stocks That Could Be the “Next AMC”

BlackBerry (TSX:BB)(NYSE:BB) is a popular stock on Reddit. Could it become the next AMC Entertainment Holdings (NYSE:AMC)?

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AMC Entertainment Holdings (NYSE:AMC) stock has had an incredible run this year. Up 2,485% for the year, it has absolutely smashed all relevant benchmarks. It’s been an incredible thing to witness. But it would be unreasonable to expect the gains to continue to be this hot. Barring the widely anticipated “short squeeze,” it’s going to be a lot harder for AMC stock to continue rising at the rate it has been.

That doesn’t mean that you can’t still find stocks that will deliver similar returns. Reddit’s WallStreetBets — the community that sparked the initial interest in AMC — has taken several stocks to the moon this year. You can never discount the possibility that they’ll repeat the feat again with another roster of stocks. With that in mind, here are two TSX stocks that have the potential to become the “next AMC.”

Cineplex

Cineplex (TSX:CGX) is a movie theatre chain that shares several similarities with AMC:

  • A sharp revenue collapse in 2020 due to COVID-19
  • Negative earnings and equity
  • Strong prospects of recovery when the pandemic is over

Cineplex’s similarity to AMC mainly rests in the business itself. It’s essentially the “AMC of Canada,” the nation’s largest theatre chain. The similarities pretty much end there, though. Unlike AMC, CGX is not trending on Reddit, and it doesn’t have a cult following of devoted fans. It does, however, have pretty high short interest, so it may be a candidate for a short-squeeze-type scenario.

BlackBerry

BlackBerry (TSX:BB)(NYSE:BB) is a Canadian tech stock that shares little similarity with AMC as a business. It’s basically a SaaS company and car software maker that has contracts with some of the biggest auto makers in the world. This couldn’t be more different from a movie theatre chain. But BB does share one noteworthy similarity with AMC: it’s already on Reddit’s radar.

According to Docoh.com, BB has been the second or third most mentioned stock on Reddit several times this year. This stock has a legion of adoring fans, who may succeed in promoting it to their fellow posters and getting it to rise.

With that said, this probably isn’t a stock you’ll want to buy at today’s prices, unless you had extreme faith in the power of Reddit’s community. BlackBerry’s most recent quarter was a huge miss, featuring

  • Declining revenue
  • A $0.11-per-share loss
  • A $33 million net cash outflow from operations

Those are not exactly great metrics. However, the net loss was down significantly from the same quarter a year ago and was heavily influenced by non-cash charges. If you take these charges out, you get an “adjusted” loss of $0.05 per share. That’s slightly better than the expected $0.06 loss, but not by much. BlackBerry’s growth from here on out is going to depend on its ability to attract and retain large enterprise clients. The company may or may not pull that off. On the one hand, it recently gained a new contract from WM Motor, but on the other, it lost one with Ford. With Reddit out of the picture, this stock probably wouldn’t have done as well as it has this year.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Andrew Button has no position in any of the stocks mentioned. The Motley Fool recommends BlackBerry and CINEPLEX INC.

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