The Motley Fool

Why I’d ignore the Cineworld share price and buy this UK reopening stock

Image source: DCM

It’s no surprise that demand for ‘reopening stocks’ has spiked in recent months. The Cineworld (LSE: CINE) share price has quadrupled from its autumn lows thanks to successful vaccine rollouts in the US and UK.

I think that I need to be extremely careful before piling into Cineworld, however. A third wave of Covid-19 infections (like in Continental Europe) in the company’s core regions could leave its reopening plans in tatters. But a resurgent public health crisis isn’t the only reason I worry about the Cineworld share price.

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…

And if you click here we’ll show you something that could be key to unlocking 5G’s full potential...

There’s certainly no shortage of people who think that cinema operators’ best days are behind them. “Cinema-going will inevitably initially be at much lower levels [after the pandemic],” Richard Broughton, research director at Ampere Analysis recently told The Guardian. “The question is what level will they return to?

Broughton’s cautiousness reflects a possible sea change in the way people watch movies and studios do business following the Covid-19 outbreak. As he comments: “There have been changes in consumer habits, with the boom in streaming, and theatre owners aren’t in the same position to put their foot down with studios over exclusivity.”

Why I’m not interested in the Cineworld share price

Clearly the prospect of a third wave of infections — and what this will mean for Cineworld’s reopening plans — isn’t the only thing investors like me need to consider. Massive changes to viewer habits pose a significant long-term threat to the Cineworld share price too. And all the while the business still has a mammoth debt pile it needs to pay down.

Cineworld cinema

There are many other UK reopening stocks I’d much rather buy than Cineworld. One of these is Wizz Air Holdings (LSE: WIZZ) from the FTSE 250.

A better buy?

Some might think that the Cineworld’s share price prospects are superior to those of Wizz Air. Successful Covid-19 vaccine rollouts in the company’s core US and UK marketplaces are fuelling hopes that its cinemas can reopen soon and stay open. By contrast infection rates in Wizz Air’s European marketplaces are spiking again and vaccine programmes in the European Union remain sluggish. The majority of the Wizz Air fleet may remain grounded for some yet.

Trading conditions at the FTSE 250 airline might remain difficult until well into the second half of 2021 too. But the company has one of the strongest balance sheets in the business to help it weather these difficult conditions. A fresh share placing in March has helped bolster its financial position still further.

As a long-term investor I feel that Wizz Air has much more to offer me than Cineworld. As I say, concerns over how far the cinema industry will contract after Covid-19 dominate thinking around these types of leisure stocks. By comparison it seems like the low-cost airline market will start growing at a tremendous pace again once the Covid-19 turbulence passes. The main concern I have about Wizz Air is that it operates in a mightily-competitive space that could hamper revenues growth.

A Top Share with Enormous Growth Potential

Savvy investors like you won’t want to miss out on this timely opportunity…

Here’s your chance to discover exactly what has got our Motley Fool UK analyst all fired up about this ‘pure-play’ online business (yes, despite the pandemic!).

Not only does this company enjoy a dominant market-leading position…

But its capital-light, highly scalable business model has previously helped it deliver consistently high sales, astounding near-70% margins, and rising shareholder returns … in fact, in 2019 it returned a whopping £150m+ to shareholders in dividends and buybacks!

And here’s the really exciting part…

While COVID-19 may have thrown the company a curveball, management have acted swiftly to ensure this business is as well placed as it can be to ride out the current period of uncertainty… in fact, our analyst believes it should come roaring back to life, just as soon as normal economic activity resumes.

That’s why we think now could be the perfect time for you to start building your own stake in this exceptional business – especially given the shares look to be trading on a fairly undemanding valuation for the year to March 2021.

Click here to claim your copy of this special report now — and we’ll tell you the name of this Top Growth Share… free of charge!

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Wizz Air Holdings. 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.