The Motley Fool

Why has the Cineworld (CINE) share price jumped 15%?

Graph of price moves, possibly in FTSE 100
Image source: Getty Images.

Cineworld (LSE: CINE) got off to a good start this week. On Monday, we saw a climb of 12%. And a bit extra in early Tuesday trading pushed the Cineworld share price to a 15% spike. The shares are still down 65% over two years, mind.

We appear to be enjoying what people are calling a James Bond bounce. The 25th film in the venerable series is due to hit the screens on Thursday. Odeon (part of AMC Entertainment Holdings) is already predicting the biggest opening for two years. That’s not much of a shout, mind, seeing as cinemas have been pretty much at a standstill for that long. But it’s all good for the headlines.

One Killer Stock For The Cybersecurity Surge

Cybersecurity is surging, with experts predicting that the cybersecurity market will reach US$366 billion by 2028more than double what it is today!

And with that kind of growth, this North American company stands to be the biggest winner.

Because their patented “self-repairing” technology is changing the cybersecurity landscape as we know it…

We think it has the potential to become the next famous tech success story. In fact, we think it could become as big… or even BIGGER than Shopify.

Click here to see how you can uncover the name of this North American stock that’s taking over Silicon Valley, one device at a time…

The movie had originally been planned for April 2020, but repeated pandemic delays have put it back until now. I welcome this progress for a couple of reasons. One is that I love the cinema (even if I’m not a Bond fan and won’t be going to this one). The other is that it’s good news for shareholders and for the Cineworld share price.

But I have to ask, does one specific film really make all that much difference? The simple answer, I think, is no. But it’s about more than that. I suspect a lot of investors were holding back until something like this happened for good reasons.

Recovery rule #1

One is a rule of thumb I follow when considering recovery situations. I try to avoid buying into a recovery until I see it starting to take root. Buying for a potential recovery before I see convincing evidence that it’s happening is too risky for me. I know, shares will already be back on the way up by the time I have the evidence I need. So I won’t bag the biggest possible gains. But against that, I reckon I’m reducing my chances of buying into a flop.

Investors have also been afraid that the pandemic closures could mark one more step toward the ultimate demise of the cinema business. We’ve already seen the shortening of the window between cinema release and online streaming during the crisis. That makes it a bit easier to sit at home and wait for films to come to you, and lowers the desirability of pulling your boots on and heading out into the cold.

But demand for the new Bond film does appear to be very strong, and that surely softens investors’ fears. Does it mean cinema audiences will bounce back as strong as ever? I’m not so sure of that.

Cineworld share price future

There will be a few more blockbusters coming to cinemas in the new few months. And I expect we’ll see what looks like a healthy recovery in the industry. I also reckon there’s a very good chance the Cineworld share price will end the year nicely ahead of where it is today.

So will I buy? No. Cineworld might now pass my ‘wait for the recovery’ rule. But it’s still a long way from my ‘don’t buy a company with massive debt’ rule. There are many good companies with strong balance sheets out there, and I just don’t need to take the risk.

FREE REPORT: Why this £5 stock could be set to surge

Are you on the lookout for UK growth stocks?

If so, get this FREE no-strings report now.

While it’s available: you'll discover what we think is a top growth stock for the decade ahead.

And the performance of this company really is stunning.

In 2019, it returned £150million to shareholders through buybacks and dividends.

We believe its financial position is about as solid as anything we’ve seen.

  • Since 2016, annual revenues increased 31%
  • In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259
  • Operating cash flow is up 47%. (Even its operating margins are rising every year!)

Quite simply, we believe it’s a fantastic Foolish growth pick.

What’s more, it deserves your attention today.

So please don’t wait another moment.

Get the full details on this £5 stock now – while your report is free.

Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.